Open AccessFrequency domain causality analysis of tourism and economic activity in Turkey
Author(s) -
Hasan Gül,
Mustafa Özer
Publication year - 2018
Publication title -
european journal of tourism research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.467
H-Index - 16
eISSN - 1314-0817
pISSN - 1994-7658
DOI - 10.54055/ejtr.v19i.327
Subject(s) - granger causality , real gross domestic product , economics , tourism , exchange rate , gross domestic product , gross domestic income , causality (physics) , short run , monetary economics , macroeconomics , econometrics , geography , gross income , public economics , physics , archaeology , tax reform , quantum mechanics , state income tax
This paper studies the dynamic relationships between real Gross Domestic Product (GDP), real exchange rate (RER) and real tourism income (TOTREC) in Turkey over the period from 2003: Q1 to 2014: Q4 by using frequency domain causality approach developed by Breitung and Candelon (2006). Our findings reveal that real GDP Granger causes real tourism income both in the short-and long-run, while real tourism income only Granger causes real GDP in the short run. Moreover, there is no Granger causality neither between real tourism income and real exchange rate nor between real GDP and real exchange rate. These findings support Tourism-led Growth Hypothesis (TLGH) only in the short-run. Therefore, there is an urgent need to develop and implement appropriate tourism policies so that the sector’s contribution to economic growth can be extended to long-run.