This paper examines the validity of the tourism-led economic growth hypothesis for the Euro Area economies. We employ linear and nonlinear autoregressive distributed lag cointegration approaches to examine the symmetric and asymmetric effects of tourism on economic growth. Furthermore, we control for the presence of structural breaks in the time series which account for the recent financial and debt crises in the Euro Area. The results support the positive impact of tourism on economic growth for most of the Euro Area economies and are robust to alternative tourism measures. The findings indicate that an asymmetric impact exists both in the long and the short run. Positive and negative shocks of tourism and real exchange rate result to very different effects, in the sign and magnitude, on economic growth.
Creation-Date: 2024-10 File-URL: https://www.sitesideas.org/wp-content/uploads/2024/10/Sites_wp20.pdf File-Format: Application/pdf Note: SITES Working Papers 20 Number: 20 Classification-JEL: E00; F00; C32; L83; O10; O11; Z32 Keywords: Tourism-Led Growth Hypothesis; Euro Area; ARDL; Nonlinear ARDL; Structural Breaks Handle: RePEc:awm:wpaper:20