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How important is tourism for the international transmission of cyclical fluctuations? Evidence from the Mediterranean

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  • Canova, Fabio
  • Dallari, Pietro

Abstract

We quantify the importance of the tourism channel for the international transmission of cyclical fluctuations to the Mediterranean basin. We use five destination countries and a number of source countries to provide broad evidence on the link. Source country output shocks produce important fluctuations in international tourism flows. Absent the tourism channel, the output effects in a typical destination country would be reduced by about one-fourth. Imported shocks account for an important portion of the fluctuations in destination countries variables. Policy prescriptions are discussed. JEL Classification: E32, C32

Suggested Citation

  • Canova, Fabio & Dallari, Pietro, 2013. "How important is tourism for the international transmission of cyclical fluctuations? Evidence from the Mediterranean," Working Paper Series 1553, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20131553
    Note: 1332270
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    References listed on IDEAS

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    3. Fabio Canova & Alain Schlaepfer, 2015. "Has the Euro‐Mediterranean Partnership Affected Mediterranean Business Cycles?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 30(2), pages 241-262, March.
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    7. Fabio Canova & Evi Pappa, 2007. "Price Differentials in Monetary Unions: The Role of Fiscal Shocks," Economic Journal, Royal Economic Society, vol. 117(520), pages 713-737, April.
    8. Koop, Gary & Korobilis, Dimitris, 2010. "Bayesian Multivariate Time Series Methods for Empirical Macroeconomics," Foundations and Trends(R) in Econometrics, now publishers, vol. 3(4), pages 267-358, July.
    9. Mayers, Sherry-Ann & Jackman, Mahalia, 2011. "Investigating the business cycle properties of tourist flows to Barbados," MPRA Paper 38646, University Library of Munich, Germany.
    10. Fabio Canova, 2005. "The transmission of US shocks to Latin America," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(2), pages 229-251.
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    12. Guizzardi, Andrea & Mazzocchi, Mario, 2010. "Tourism demand for Italy and the business cycle," Tourism Management, Elsevier, vol. 31(3), pages 367-377.
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    Cited by:

    1. Fabio Canova & Alain Schlaepfer, 2015. "Has the Euro‐Mediterranean Partnership Affected Mediterranean Business Cycles?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 30(2), pages 241-262, March.
    2. Fernando José Pérez Forero, 2015. "Comparing the Transmission of Monetary Policy Shocks in Latin America: A Hierachical Panel VAR," Premio de Banca Central Rodrigo Gómez / Central Banking Award "Rodrigo Gómez", Centro de Estudios Monetarios Latinoamericanos, CEMLA, number prg2015eng, July-Dece.
    3. Jesús Iglesias & Manuel E Gegundez & Antonio A Golpe & José Carlos Vides, 2018. "How do foreign income shocks affect the magnitude of Spanish tourism?," Tourism Economics, , vol. 24(7), pages 839-871, November.
    4. Martínez-Martínez, Aurora & Cegarra-Navarro, Juan-Gabriel & García-Pérez, Alexeis, 2015. "Environmental knowledge management: A long-term enabler of tourism development," Tourism Management, Elsevier, vol. 50(C), pages 281-291.

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    More about this item

    Keywords

    Bayesian random coefficient VARs; International business cycles; Mediterranean basin; Tourism flows;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • 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

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