Economic Policy Uncertainty and Tourism Demand: Empirical Evidence from the USA

2016 ◽  
Vol 19 (1) ◽  
pp. 99-106 ◽  
Author(s):  
Giray Gozgor ◽  
Serdar Ongan
Keyword(s):  
Economic Policy ◽  
Empirical Evidence ◽  
Policy Uncertainty ◽  
Tourism Demand ◽  
Economic Policy Uncertainty ◽  
The Usa

Geopolitical risk, economic growth, economic uncertainty and international inbound tourism: an Indian Illustration

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sudeshna Ghosh
Keyword(s):  
Economic Growth ◽  
Economic Policy ◽  
Trade Openness ◽  
Policy Uncertainty ◽  
Tourism Demand ◽  
Content Type ◽  
Economic Policy Uncertainty ◽  
Long Run ◽  
Geopolitical Risks

Purpose This paper aims to consider the role of geopolitical risk in explaining tourism demand in India, a major tourist destination of the Asian region. Furthermore, the study also considers how in addition to geopolitical risk, economic policy uncertainty, economic growth, exchange rate, inflation and trade openness impact tourism demand. Design/methodology/approach The Bayer and Hanck (2013) method of cointegration is applied to explore the relationship between geopolitical risk and tourism demand. Furthermore, the study has also used the auto distributed lag model to determine whether there is a long-run cointegrating association between tourism demand, geopolitical risk, economic policy uncertainty, economic growth, exchange rate and trade openness. Finally, the vector error correction model confirms the direction of causality across the set of the major variables. Findings This paper finds that geopolitical risk adversely impacts inbound international travel to India. This study also obtains the consistency of the results across different estimation techniques controlling for important macro variables. The Granger causality test confirms the unidirectional causality from geopolitical risk to tourism and further from economic uncertainty to tourism. The findings from the study confirm that geopolitical risks have long-term repercussions on the tourism sector in India. The results indicate that there is an urgent need to develop a pre-crisis management plan to protect the aura of Indian tourism. The tourism business houses should develop skilful marketing strategies in the post-crisis to boost the confidence of the tourists. Research limitations/implications This paper provides valuable practical implications to tourism business houses. The tourism business houses can explore geopolitical risk measure and economic policy uncertainty measure to analyse the demand for international tourism in India. Further, the major stakeholders can establish platforms to help tourists to overcome the fear associated with geopolitical risk. Originality/value This study is the first of its kind to explore the geopolitical risks and their long-run consequences in the context of tourism in India. The study puts emphasis on the role of national policy to maintain peace otherwise it would be detrimental to tourism.

Testing the efficacy of the economic policy uncertainty index on tourism demand in USMCA: Theory and evidence

2019 ◽  
Vol 26 (8) ◽  
pp. 1344-1357 ◽  
Author(s):  
Cem Işık ◽  
Ercan Sirakaya-Turk ◽  
Serdar Ongan
Keyword(s):  
United States ◽  
Economic Policy ◽  
Explanatory Power ◽  
The United States ◽  
Policy Uncertainty ◽  
Economic Policies ◽  
Tourism Demand ◽  
Economic Policy Uncertainty ◽  
Demand Models ◽  
The Impact

The global economic outlook is more uncertain than ever before and sensitive to uncertainties related to a variety of economic policies decisions of all stakeholders and governments. These perceived uncertainties may be the culprit in shrinking the size of overall economic activity. Under increasing uncertainties, travel and vacation plans of consumers can be canceled or postponed. Therefore, policy-related economic uncertainties are expected to affect tourism demand beyond well-established economic and noneconomic factors. In this study, we explore the efficacy and the impact of the economic policy uncertainty (EPU) index in predicting the tourism demand on international tourist arrivals (a measure of tourism demand) to the United States from Mexico and Canada over the period of January 1996–September 2017. The findings of the study reveal that EPU is a significant predictor as increases in the EPU index lead to decreases in tourism demand to the United States. Canadian tourists seem to be more sensitive to EPUs. Increases in the EPU index cause them to reduce Canadians’ vacations to the United States proportionally more than the Mexicans. To enhance the explanatory power of current models, the uncertainty can be a theoretically significant construct thus needs to be included when calibrating demand models.

scholarly journals Do Green Bonds Act as a Hedge or a Safe Haven against Economic Policy Uncertainty? Evidence from the USA and China

2021 ◽  
Vol 9 (3) ◽  
pp. 40
Author(s):  
Inzamam Ul Haq ◽  
Supat Chupradit ◽  
Chunhui Huo
Keyword(s):  
Economic Policy ◽  
Rare Earth ◽  
Rare Earth Elements ◽  
Clean Energy ◽  
Policy Uncertainty ◽  
Safe Haven ◽  
Economic Policy Uncertainty ◽  
The Usa ◽  
Policy Risk

Economic policy uncertainty and particularly COVID-19 has stimulated the need to investigate alternative avenues for policy risk management. In this context, this study examines the dynamic association among economic policy uncertainty, green bonds, clean energy stocks, and global rare earth elements. A dynamic conditional correlation-multivariate generalized autoregressive conditional heteroscedasticity (DCC-MGARCH) model was used to gauge the time-varying co-movements among these indices. The analysis finds that green bonds act more as a hedge than a safe haven against economic policy uncertainty (EPU). In the case of diversification, green bonds work as diversifiers with clean energy stocks and rare earth elements during COVID-19 and in the whole sample period. Additionally, clean energy stocks and rare earth elements show safe haven properties against EPUs. This study contributes to the hedging and safe haven literature with some new insight considering the role of green bonds and clean energy stocks. Additionally, the outcomes of the research contribute toward the literature of portfolio diversification theory. These findings pave the way for not only US investors to hedge long-term economic policy risk by investing in green bonds, but also for China and the UK, as these financial assets (green bonds, clean energy stocks, and rare earth metals) and EPU are long-term financial and economic variables.

scholarly journals Geopolitical-Risk and Economic Policy–Uncertainty Impacts on Tourist Flows from Neighboring Countries: A Wavelet Analysis

2021 ◽  
Vol 13 (24) ◽  
pp. 13751
Author(s):  
Alisa Kazakova ◽  
Insin Kim
Keyword(s):  
Economic Policy ◽  
South Korea ◽  
Tourism Industry ◽  
Policy Uncertainty ◽  
Tourism Demand ◽  
Economic Policy Uncertainty ◽  
China And Japan ◽  
The Impact ◽  
Wavelet Coherency ◽  
Geopolitical Risks

This paper investigates the nexus of geopolitical risks (GPRs), economic policy uncertainty (EPU), and tourist arrivals in South Korea. Specifically, this research examines whether arrivals from neighboring tourism source countries (i.e., China and Japan) are influenced by geopolitical events and economic volatilities in South Korea. To establish the research purpose, we investigated the relationships among GPRs, EPU, and tourism demand by using monthly data from January 2003 to November 2019. Additionally, innovative techniques (continuous wavelets, wavelet coherency, and wavelet phase difference) were employed, which allow the decomposition of time series considering different time and frequency components. The results demonstrate inconsistent and heterogeneous co-movements between variables that are localized across different time periods and frequencies. In addition, we detected several significant coherencies that prove the important role of GPR and EPU in explaining changes in the numbers of tourists arriving in South Korea from China and Japan. In terms of time domain, negative and positive correlations in tourism demand were detected, meaning that economic and geopolitical shocks may not always lead to negative consequences. From the frequency domain, the causal effects of GPR mostly appear to have short- to mid-run implications, with almost no relationship in the low-frequency band, whereas EPU holds a heterogeneous influence varying short-term to long-term, including higher to lower frequencies. Results show the resilience of the tourism industry against the transient effects of economic and geopolitical shocks. Tourists become adversely affected by external events such as geopolitical risks and economic uncertainties, but the impact is not consistent over time for tourists from countries neighboring Korea. The findings provide a deeper understanding of how crisis events, including political instability and economic fluctuations, can affect inbound tourism in geographically and historically interrelated countries. Therefore, to minimize the negative effect on tourism demand, it is important for practitioners to consider potential external threats when making forecasts.

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