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A structural VAR model of the Fiji Islands

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  • Narayan, Seema

Abstract

A four-dimensional Structural Vector Auto-regression (SVAR) model is applied to investigate the implications of fuel imports and devaluation policy on Fiji's current account deficits and economic growth. The paper finds that short-term deterioration of the current account is partly due to higher fuel imports. The impulse response analysis shows that a standard deviation fall in Fiji's REER leads to a J-curve type response in the current account within a short period. Furthermore, fuel import demand and devaluations are found to have negative, but transitory, effect on economic growth.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 31 (2013)
Issue (Month): C ()
Pages: 238-244

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Handle: RePEc:eee:ecmode:v:31:y:2013:i:c:p:238-244

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Web page: http://www.elsevier.com/locate/inca/30411

Related research

Keywords: SVAR; Fuel imports; Current account; Economic growth; Devaluation; Small Island Developing State;

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