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Do Tourism Receipts Contribute to the Sustainability of Current Account Deficits: A Case Study of Barbados

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  • Lorde, Troy
  • Lowe, Shane
  • Francis, Brian

Abstract

Given Barbados’ recent history of persistent current account deficits and reliance on tourism as a major source of foreign exchange and driver of the economy, this paper investigated the contribution of tourism receipts to the sustainability of Barbados’ current account deficits. Utilizing an inter-temporal budget approach, it was found that Barbados’ current account deficits were weakly sustainable as a result of tourism’s contribution, underscoring the island’s dependence on the industry.

Suggested Citation

  • Lorde, Troy & Lowe, Shane & Francis, Brian, 2010. "Do Tourism Receipts Contribute to the Sustainability of Current Account Deficits: A Case Study of Barbados," MPRA Paper 95495, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:95495
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    References listed on IDEAS

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    1. Husted, Steven, 1992. "The Emerging U.S. Current Account Deficit in the 1980s: A Cointegration Analysis," The Review of Economics and Statistics, MIT Press, vol. 74(1), pages 159-166, February.
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    6. Wu, Jyh-Lin, 2000. "Mean reversion of the current account: evidence from the panel data unit-root test," Economics Letters, Elsevier, vol. 66(2), pages 215-222, February.
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    9. Quintos, Carmela E, 1995. "Sustainability of the Deficit Process with Structural Shifts," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(4), pages 409-417, October.
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    Cited by:

    1. Lorde, Troy, 2012. "Evaluating the Impact of Crime on Tourism in Barbados: A Transfer Function Approach," MPRA Paper 95544, University Library of Munich, Germany.
    2. Mayers, Sherry-Ann & Jackman, Mahalia, 2011. "Investigating the business cycle properties of tourist flows to Barbados," MPRA Paper 38646, University Library of Munich, Germany.
    3. Jackman, Mahalia, 2012. "What Prompts Central Bank Intervention in the Barbadian Foreign Exchange Market?," MPRA Paper 41703, University Library of Munich, Germany.

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    More about this item

    Keywords

    inter-temporal budget approach; current account deficits; sustainability; tourism receipts; Barbados; SITES;
    All these keywords.

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • H27 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other Sources of Revenue
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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