Issues in Monetary and Fiscal Policy in Small Developing States

A Case Study of the Pacific

image of Issues in Monetary and Fiscal Policy in Small Developing States

This study examines how monetary and fiscal policies are implemented in Pacific small states and the impact on growth and development in these countries. It carefully sets out both the policy and institutional constraints in monetary and fiscal policy management, provides case study examples of policy implementation in practice, and suggests policy options that can be used by these countries.



Monetary Policy Transmission Mechanisms in Pacific Island Countries

The 14 Pacific island countries (PICs)1 which are formal members of the Pacific Islands Forum are spread over about 10,000 kilometres (km) from east to west and 5,000 km from north to south, with a combined exclusive economic zone (EEZ) of about 20 million sq.km. The total land area is just over 500,000 sq.km of which Papua New Guinea (PNG) accounts for 88 per cent, Fiji, Solomon Islands and Vanuatu for 11 per cent, with the other 10 countries making up the remaining 1 per cent. The population of the PICs is about seven million people, of which close to six million are in PNG.


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