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dc.contributor.authorLahari, Willieen_NZ
dc.date.available2011-04-07T03:05:15Z
dc.date.copyright2010-02-01en_NZ
dc.identifier.citationLahari, W. (2010). Permanent and Transitory Shocks among Pacific Island Economies - Prospects for a Pacific Islands Currency Union (Economics Discussion Papers Series No. 1001). Department of Economics, University of Otago. Retrieved from http://hdl.handle.net/10523/855en
dc.identifier.urihttp://hdl.handle.net/10523/855
dc.description.abstractThis paper re-kindles the debate on the feasibility of a Pacific Islands currency union in view of the recent expansion and consolidation of regional strategies and agreements such as the ‘Pacific Plan’ and the Pacific Agreement on Closer Economic Relations Plus. These initiatives, including past efforts, have given limited consideration to the subject for a Pacific Islands currency union. This study exploits the optimal currency area theoretical framework and employs the Gonzalo and Ng (2001) decomposition method. This is the first time this method is used in the analysis relating to currency or monetary unions. Newly-constructed quarterly time series data are also applied. This paper investigates the dynamic effects of permanent and transitory shocks on key macroeconomic variables among Pacific Island countries (PICs). Evidence shows that the proposed union of six PICs (Fiji, PNG, Samoa, Solomon Islands, Vanuatu and Tonga) do not meet most of the preconditions for a union. However, further investigation shows evidence for the Melanesian countries (Fiji, PNG, Solomon Islands and Vanuatu) to possibly form a monetary union, preferably with the Australian dollar as the anchor currency. Nonetheless, further costs in terms of the alignment of policies by Melanesian countries are required.en_NZ
dc.format.mimetypeapplication/pdf
dc.publisherDepartment of Economics, University of Otagoen_NZ
dc.relation.ispartofseriesEconomics Discussion Papers Seriesen_NZ
dc.relation.urihttp://www.business.otago.ac.nz/econ/research/discussionpapers/index.htmlen_NZ
dc.subjectCurrency unionen_NZ
dc.subjectGonzalo and Ng (2001) decompositionen_NZ
dc.subjectPacific Island countriesen_NZ
dc.subject.lcshHB Economic Theoryen_NZ
dc.titlePermanent and Transitory Shocks among Pacific Island Economies - Prospects for a Pacific Islands Currency Unionen_NZ
dc.typeDiscussion Paperen_NZ
dc.description.versionPublisheden_NZ
otago.bitstream.pages36en_NZ
otago.date.accession2010-06-01 21:21:45en_NZ
otago.schoolDepartment of Economicsen_NZ
otago.openaccessOpen
otago.place.publicationDunedin, New Zealanden_NZ
dc.identifier.eprints911en_NZ
otago.school.eprintsEconomicsen_NZ
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