THE SOURCES OF COMMODITY EXPORT REVENUE VARIABILITY IN THE SOUTH-PACIFIC ISLAND NATIONS

Using annual time-series data for the selected South Pacific Island Nations (SPINs), sources of commodity export revenue variability (CERV) are analysed using forecast error decomposition and impulse response analysis based on vector autoregression (VAR) models. The evidence shows that there are different sources which contribute to CERV, although the magnitudes of the contributions are variable. External market factors are important, but it is shown that domestic factors (especially the GDP) have equal if not greater influence on CERV in the selected SPINs, particularly in Solomon Islands and Fiji.