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The Exchange Rate and US Tourism Trade, 1973–2007

Ka Ming Cheng (), Hyeongwoo Kim () and Henry Thompson ()

Tourism Economics, 2013, vol. 19, issue 4, 883-896

Abstract: This paper investigates exchange rate effects on US tourism trade in structural vector autoregressive models with quarterly data for the floating exchange rate from 1973 to 2007. Tourism export revenue and import spending are examined along with the tourism trade balance. Depreciation raises the US tourism trade balance with a unit elastic effect after six quarters with no evidence of J-curve behaviour. Only export revenue is marginally sensitive to the exchange rate. Foreign travel is a luxury good for US tourists, while travel to the USA is a normal good for foreign tourists.

Keywords: trade balance; US tourism; exchange rates (search for similar items in EconPapers)
Date: 2013
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DOI: 10.5367/te.2013.0227

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