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The Exchange Rate and US Tourism Balance of Trade

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  • Cheng, Ka Ming
  • Kim, Hyeongwoo
  • Thompson, Henry

Abstract

This paper investigates evidence on the effect of dollar depreciation on the US tourism balance of trade. Export revenue and import spending functions are estimated separately with structural vector autoregressive methods to better capture the dynamic adjustment to exchange rate shocks. Quarterly data cover the period of floating exchange rates from 1973 through 2007. Depreciation raises long term US export revenue but there is no effect on import spending.

Suggested Citation

  • Cheng, Ka Ming & Kim, Hyeongwoo & Thompson, Henry, 2009. "The Exchange Rate and US Tourism Balance of Trade," MPRA Paper 18318, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:18318
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    File URL: https://mpra.ub.uni-muenchen.de/18318/1/MPRA_paper_18318.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    balance of trade; exchange rate; tourism; structural vector autoregressive model; J-curve;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F10 - International Economics - - Trade - - - General

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