Forecasting Tourism Expenditure and Growth: A VAR/VECM Analysis for Greece at Both Aggregated and Disaggregated Levels

International Research Journal of Finance and Economics, Issue 96, 2012

Posted: 28 Jan 2013

See all articles by Andreas G. Georgantopoulos

Andreas G. Georgantopoulos

National and Kapodistrian University of Athens; Panteion University of Athens - Panteion University of Political and Social Sciences

Date Written: 2012

Abstract

Tourism is one of the most important factors in the productivity of the Greek economy with significant multiplier effects on the country’s economic activity. This study tests for the existence and direction of causality between output growth and tourism expenditure using a trivariate model with real effective exchange rate, analysed as a whole and in sub-categories respectively for the period 1988-2011. Results from the aggregated model indicate that all variables return to their long-run equilibrium relationships and unidirectional causal relationship is reported from tourism expenditure to real output in the short-run. Moreover, results from the disaggregated model imply strong bidirectional causal links between growth and business travel and tourism spending (BTS) in the longrun and unidirectional causal links from leisure travel and tourism spending (LTS) to growth and to BTS. Forecasts for the period 2012-2020 indicate increasing total tourism expenditure and particularly for the case of BTS.

Keywords: Tourism Expenditures, Economic Growth, Cointegration, VECM, Greece

JEL Classification: C22, E00, F43

Suggested Citation

Georgantopoulos, Andreas G., Forecasting Tourism Expenditure and Growth: A VAR/VECM Analysis for Greece at Both Aggregated and Disaggregated Levels (2012). International Research Journal of Finance and Economics, Issue 96, 2012, Available at SSRN: https://ssrn.com/abstract=2207400

Andreas G. Georgantopoulos (Contact Author)

National and Kapodistrian University of Athens ( email )

Greece

Panteion University of Athens - Panteion University of Political and Social Sciences ( email )

136 Sygrou
Athens
Greece

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