The effect of economic policy uncertainty on US tourism net exports

Abebe Hailemariam, Kris Ivanovski

Research output: Contribution to journalArticleResearchpeer-review

8 Citations (Scopus)

Abstract

This article models the endogenously interrelated relationship between global economic policy uncertainty (EPU), world industrial production (WIP), and the demand for US tourism net export (TNX) expenditures. To do so, we apply an identified structural vector autoregression model over monthly data spanning from January 1999 to October 2020. Our findings reveal that a positive shock in WIP has a significant positive effect on demand for TNXs. In contrast, unanticipated increases in price and EPU have a statistically significant negative effect on TNXs. Our results show that, in the long run, a one standard deviation shock in global EPU explains about 26.05% of the variations in tourism net service exports.

Original languageEnglish
Pages (from-to)2219-2227
Number of pages9
JournalTourism Economics
Volume28
Issue number8
DOIs
Publication statusPublished - Dec 2022

Keywords

  • economic policy uncertainty
  • global industrial output
  • tourism
  • tourism service export

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