Role of Money in Smaller Pacific Island Countries

Table 7

Granger causality test for output and prices in four PICs.

Country	𝐹-statistics			ECT; (𝑡 statistics)
	LM2	LIR	LER
Effects on output
Samoa	17.583***	14.189***	4.228*	−0.6458**; (−2.697)
Solomon Islands	7.671***	1.759	3.492*	−0.3801***; (−3.056)
Tonga	7.097***	1.342	5.081**	−0.4181***; (−3.306)
Vanuatu	8.732***	0.148	3.768*	−0.3495**; (−2.540)
Effects on prices
Samoa	5.079***	0.371	3.767**	−0.5965**; (−2.249)
Solomon Islands	8.131***	4.876**	11.947***	−0.3159**; (−2.757)
Tonga	16.609***	14.007***	5.984**	−0.9035***; (−4.176)
Vanuatu	4.093**	0.633	3.816*	−0.6684***; (−5.743)

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