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Travel hysteresis in the US current account after the mid-1980s

Author

Listed:
  • Sergio Da Silva

    (Federal University of Santa Catarina, Brazil)

  • Guilherme Moura

    (University of Kiel, Germany)

  • Roberto Meurer

    (Federal University of Santa Catarina, Brazil)

Abstract

Following the real appreciation of the US dollar in the first half of the 1980s, travel expenditures in the current account soared. Employing standard regression techniques as well as Markov-switching regime analysis we show that such expenditures did not return to their pre-appreciation levels thereafter. The permanent increase suggests the presence of travel hysteresis in the US current account after the mid-1980s.

Suggested Citation

  • Sergio Da Silva & Guilherme Moura & Roberto Meurer, 2005. "Travel hysteresis in the US current account after the mid-1980s," Economics Bulletin, AccessEcon, vol. 14(2), pages 1-10.
    • Handle: RePEc:ebl:ecbull:eb-05n10001
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    References listed on IDEAS

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    1. Baldwin, Richard, 1988. "Hyteresis in Import Prices: The Beachhead Effect," American Economic Review, American Economic Association, vol. 78(4), pages 773-785, September.
    2. Avinash Dixit, 1989. "Hysteresis, Import Penetration, and Exchange Rate Pass-Through," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 104(2), pages 205-228.
    3. Roberts, Mark A. & McCausland, W. David, 1999. "Multiple international debt equilibria and irreversibility," Economic Modelling, Elsevier, vol. 16(2), pages 179-188, April.
    4. Richard Baldwin & Paul Krugman, 1989. "Persistent Trade Effects of Large Exchange Rate Shocks," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 104(4), pages 635-654.
    5. repec:ebl:ecbull:v:6:y:2005:i:24:p:1-17 is not listed on IDEAS
    6. Sergio Da Silva & Guilherme Moura & Roberto Meurer, 2005. "Travel hysteresis in the Brazilian current account," Economics Bulletin, AccessEcon, vol. 6(24), pages 1-17.
    7. W David McCausland, 2002. "Exchange Rate Hysteresis: The Effects of Overshooting and Short‐Termism," The Economic Record, The Economic Society of Australia, vol. 78(240), pages 60-67, March.
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    More about this item

    JEL classification:

    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations
    • F3 - International Economics - - International Finance

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