Do Tourist Arrivals Contribute to the Stable Exchange Rate Evidence from Indonesia

Haryo Kuncoro ()
Additional contact information
Haryo Kuncoro: Faculty of Economics State University of Jakarta, Postal: ID

Journal of Advanced Research in Management, 2016, vol. 7, issue 1, 63-79

Abstract: The impact of exchange rate on tourism arrivals fluctuation has been well accepted in the frame work of demand function However literature on the influence of tourism arrivals on exchange rate stabilization revealed inconclusive This paper attempts to analyze the economic importance of international tourism arrivals in Indonesia based on the question of whether tourism arrivals contribute to stabilize exchange rate Estimation of monthly time series data for the period of 2004 13 presents that Hedrick Prescott filtered cyclical components of tourism arrivals and exchange rate are co integrated and bi directional Granger causality The results of VAR present that cyclical characteristics of tourism arrivals are pro cyclical to exchange rate implying that the increase in tourism arrivals induce the destination currency appreciation These results indicate that tourism arrivals are sustainable inflow and have a big potency to absorb other external funding resources volatility in order to maintain adequate international reserve and therefore contribute to achieve the stable exchange rate In such a case improving the competitiveness of tourism sector should be an integral part of the exchange rate stabilization program

Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:srs:jemt00:v:7:y:2016:i:1:p:63-79

Access Statistics for this article

Journal of Advanced Research in Management is currently edited by Ramona PIRVU

More articles in Journal of Advanced Research in Management from ASERS Publishing
Bibliographic data for series maintained by Claudiu Popirlan ( this e-mail address is bad, please contact ).