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The Greek tourism-led growth revisited: insights and prospects

Author

Listed:
  • Sarantis Lolos

    (Panteion University)

  • Panagiotis Palaios

    (National and Kapodistrian University of Athens)

  • Evangelia Papapetrou

    (Bank of Greece and National and Kapodistrian University of Athens)

Abstract

The paper investigates empirically the tourism-growth relationship in Greece, over the period 1960-2020. We find that the long-run relationship between tourism and output is positive and is characterized by a substantially faster convergence of output after a negative shock than after a positive one. Using asymmetric error-correction model analysis the results show that the short-term adjustment path occurs through the level of output for negative deviations from the long-run equilibrium, thus supporting the tourism-led growth hypothesis. Linear quantile regression analysis indicates that while the impact of tourism remains positive and significant across the output distribution it is stronger at lower quantiles of output than at higher ones. Our results have important policy implications, since the tourism-led growth hypothesis is a useful policy recommendation, but it should not be considered a cure-all policy.

Suggested Citation

  • Sarantis Lolos & Panagiotis Palaios & Evangelia Papapetrou, 2021. "The Greek tourism-led growth revisited: insights and prospects," Working Papers 289, Bank of Greece.
    • Handle: RePEc:bog:wpaper:289
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    More about this item

    Keywords

    tourism; economic growth; tourism-led growth hypothesis; threshold cointegration approach; quantile regression approach.;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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