Table 7: Granger causality test for output and prices in four PICs.

Country -statisticsECT
( statistics)
LM2LIRLER

Effects on output
 Samoa17.583***14.189***4.228*−0.6458**
(−2.697)
 Solomon Islands7.671***1.7593.492*−0.3801***
(−3.056)
 Tonga7.097***1.3425.081**−0.4181***
(−3.306)
 Vanuatu8.732***0.1483.768*−0.3495**
(−2.540)
Effects on prices
 Samoa5.079***0.3713.767**−0.5965**
(−2.249)
 Solomon Islands8.131***4.876**11.947***−0.3159**
(−2.757)
 Tonga16.609***14.007***5.984**−0.9035***
(−4.176)
 Vanuatu4.093**0.6333.816*−0.6684***
(−5.743)

Notes: *, **, and ***indicate significance at 10%, 5%, and 1% levels, respectively. Figures in parentheses representing statistics.