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The US Tourism Trade Balance and Exchange Rate Shock

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

No auwp2011-12, Auburn Economics Working Paper Series from Department of Economics, Auburn University

Abstract: This paper investigates the effect of dollar depreciation on the US tourism trade balance. Export revenue and import spending functions are estimated separately with structural vector autoregressive methods to better capture dynamic adjustments to exchange rate shocks. Quarterly data cover the period of floating exchange rates from 1973 through 2007. Depreciation has no significant effect on tourism export revenue or import spending. US tourists are more sensitive to income than are tourists coming to the US.

Keywords: Balance of Trade; Exchange Rate; Tourism; Structural Vector Autoregressive Model; J-Curve (search for similar items in EconPapers)
JEL-codes: C32 F10 (search for similar items in EconPapers)
Date: 2011-09
New Economics Papers: this item is included in nep-tur
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