tourism demand forecasting models choice of appropriate variable to represent tourists cost of living abstract price is generally regarded as a major determinant of demand tourism has two price elements the cost of travel to the destination and the cost of living for tourists in the destination previous studies where econometric forecasting models have been developed for international tourism demand usually take the consumer price index in a country to be a proxy for the cost of tourism in that country owing to lack of appropriate data this article attempts to evaluate the performance of proxy variables compared with a specific tourists cost of living variable within the context of tourism demand forecasting models

demand for rural tourism the effects of quality and information the development of rural tourism is regarded as a promising diversification strategy especially for lagging and mountainous areas of the european union research concerning the demand and or supply of rural tourism services has been limited within the agricultural economics domain despite the significance attached to rural tourism by various rural development policy measures and initiatives the article examines the expenditure behavior of rural tourists within a framework of demand for composite heterogeneous goods the proposed framework captures the quality of the tourism experience as the commodity s unit value a quantifiable economic variable examines its effects on expenditures and allows for the estimation of elasticity in prices regarding expenditure and quantity empirical analysis is facilitated by a survey recording the expenditure behavior of 465 tourists in two rural and lagging areas of greece the quality of the tourism experience is significantly and positively affected by the income the source from which information about the trip is retrieved internet newspapers as well as general press and special travel press and by the amount of information sought by the consumer prior to the trip in turn the quality of the tourism experience is the major endogenous factor that positively influences expenditures for rural tourism further research is needed before evidence provided in this work can be used to draw policy conclusions and recommendations

optimal taylor rules when targets are uncertain abstract we analyze the optimal taylor rule in the standard new keynesian model when output and inflation are imperfectly observed when the central bank observes inflation and the output gap with error the optimal taylor rule features tempered responses so as not to impart unnecessary volatility to the economy if the taylor rule is expressed in terms of estimated output and inflation it is optimal to respond infinitely strongly to estimated deviations from the targets because filtered estimates are based on current and past observations such taylor rules appear to exhibit interest rate smoothing even though the monetary authority has no explicit preference for smooth interest rates under such a taylor rule the estimates of inflation and the output gap are perfectly negatively correlated in the data these gaps are slightly positively correlated suggesting that the central bank is systematically underreacting to estimated inflation and the output gap

determinants of international tourism a three dimensional panel data analysis international tourism is a fast growing industry generating half a trillion dollars in annual revenues and accounting for almost 10 of total international trade and almost half of total trade in services yet it has so far failed to receive the attention it deserves from mainstream economics this paper attempts to provide an initial understanding of the determinants of international tourism this paper claims that international tourism as other forms of trade in services is driven by unique factors of production and may be better dealt with in a single industry study rather than in a general equilibrium trade model in order to understand these determinants the world is viewed as a market of differentiated products and a discrete choice estimation technique is applied to a large three dimensional data set of tourist flows it is shown that a relatively simple estimation technique combined with a rich data set can deliver reasonable substitution patterns it is found among other things that pol

optimal interest rate rules and inflation stabilization versus price level stabilization abstract this paper compares the properties of interest rate rules such as simple taylor rules and rules that respond to price level fluctuations called wicksellian rules in a basic forward looking model by introducing appropriate history dependence in policy wicksellian rules perform better than optimal taylor rules in terms of welfare robustness to alternative shock processes and are less prone to equilibrium indeterminacy a simple wicksellian rule augmented with a high degree of interest rate inertia resembles a robustly optimal rule i e a monetary policy rule that implements the optimal plan and that is also completely robust to the specification of exogenous shock processes

does tourism effectively stimulate malaysia s economic growth abstract this study attempts to further verify the validity of the tourism led growth hypothesis in malaysia using a multivariate model derived from the solow growth theory it employs annual data from 1975 to 2011 we find that economic growth tourism and other determinants are cointegrated specifically tourism has a positive impact on malaysia s economic growth both in the short run and in the long run the granger causality test indicates that tourism granger causes economic growth all this provides the empirical support for the tourism led growth hypothesis in malaysia in light of this any policy initiative that promotes tourism could contribute to malaysia s economic growth

real wage rigidities and the new keynesian model most central banks perceive a trade off between stabilizing inflation and stabilizing the gap between output and desired output however the standard new keynesian framework implies no such trade off in that framework stabilizing inflation is equivalent to stabilizing the welfare relevant output gap in this paper we argue that this property of the new keynesian framework which we call the divine coincidence is due to a special feature of the model the absence of nontrivial real imperfections we focus on one such real imperfection namely real wage rigidities when the baseline new keynesian model is extended to allow for real wage rigidities the divine coincidence disappears and central banks indeed face a trade off between stabilizing inflation and stabilizing the welfare relevant output gap we show that not only does the extended model have more realistic normative implications but it also has appealing positive properties in particular it provides a natural interpretation for the dynamic inflation unemployment relation found in the data

holiday taking and income this paper is the first attempt to estimate the determinants of holiday taking across several countries to accomplish this a two stage estimation procedure is employed which enables incongruous income categories to be transformed into a single income variable it is found that in the mid 1980s there was a substantial similarity in the holiday taking behaviour of europeans the large national differences in holiday participation are explained by differences in income and demographic factors a remarkable regularity in the responsiveness of the probability of holiday taking to marginal changes in income is found

tourism policy a midsummer night s dream abstract the changing nature of the tourism industry with its move away from mass tourism towards greater market segmentation use of new technologies differentiation of the product and adoption of new management styles demands a change in the substance of governments tourism policies this article reviews the development of tourism policy from pure promotion to product development to the current goal of maintaining competitiveness it argues for a more balanced partnership between private public and voluntary sectors and discusses various national plans that may serve as a model for future policy making the trend in some quarters towards privatization of policy programmes is considered unsustainable

return migration wage differentials and the optimal migration duration in simple static models migration increases with the wage differential between host and home country in a dynamic framework and if migrations are temporary the size of the migrant population in the host country depends also on the migration duration this paper analyses optimal migration durations in a model which rationalises the decision of the migrant to return to his home country despite persistently higher wages in the host country the analysis shows that if migrations are temporary the optimal migration duration may decrease if the wage differential grows larger using micro data for germany the second part of the paper provides empirical evidence which is compatible with this hypothesis

consumer behaviour in greece an application of the almost ideal demand system this paper estimates the almost ideal demand system on greek data for the period 1960 1986 for seven commodity groups the results conform with earlier research findings that the homogeneity and symmetry restrictions of demand theory are broadly inconsistent with the data the imposition of the restrictions leads to substantial changes in the estimated elasticities in both the static and dynamic specifications the introduction of habit effects with lagged consumption supported statistically by the data led to plausible results leaving however the problem of rejection of homogeneity and symmetry intact

high frequency identification of monetary non neutrality the information effect we present estimates of monetary non neutrality based on evidence from high frequency responses of real interest rates expected inflation and expected output growth our identifying assumption is that unexpected changes in interest rates in a 30 minute window surrounding scheduled federal reserve announcements arise from news about monetary policy in response to an interest rate hike nominal and real interest rates increase roughly one for one several years out into the term structure while the response of expected inflation is small at the same time forecasts about output growth also increase the opposite of what standard models imply about a monetary tightening to explain these facts we build a model in which fed announcements affect beliefs not only about monetary policy but also about other economic fundamentals our model implies that these information effects play an important role in the overall causal effect of monetary policy shocks on output

on the optimal monetary policy response to noisy indicators abstract we describe a behavior of a central bank when its measures of current inflation and output are subject to measurement errors in a framework of optimizing models with nominal price stickiness in our model a central bank sets the interest rate equal to its current estimate of the so called wicksellian natural rate of interest this is shown to imply that the interest rate responds to the central bank s estimates of both current inflation and output gap as advocated by taylor 1993 it is also shown that the noise contained in the indicators justifies a degree of policy cautiousness a reduced form representation of optimal policy should exhibit interest rate smoothing which is often found in the empirical literature on monetary policy reaction functions

the impact of crisis events and macroeconomic activity on taiwan s international inbound tourism demand abstract the number of inbound tourism arrivals directly impacts the tourism industry and the government agency investments therein therefore policymakers need to improve their understanding of how crisis events affect the demand for inbound tourism from the first quarter of 1996 to the second quarter of 2006 taiwan experienced four major disasters at approximately two year intervals these disasters included the asian financial crisis in 1997 the 21st september 1999 earthquake the 11th september 2001 attacks in the united states and the outbreak of sars in 2003 this paper examines the impact of crisis events on the demand for tourism in order to establish a better understanding of changes and trends in the demand for international tourism this paper uses the auto regression distributed lag model by pesaran shin and smith pesaran m h shin y smith r j 2001 bounds testing approaches to the analysis of long run relationship journal of applied econometrics 16 289 326 to examine the negative impact of these disasters on the demand for inbound tourism this paper also explores the influence of variables such as foreign exchange rates incomes relative prices and transportation costs on the dynamics of the demand for inbound tourism this paper finds that a long term equilibrium exists among all variables indicating that macroeconomic variables may be used to determine the rise or fall of the number of inbound tourism arrivals income and foreign exchange rates are both significant explanatory variables in terms of incurred losses the number of inbound tourism arrivals suffered the greatest decline during the outbreak of severe acute respiratory syndrome sars followed by the 21st september 1999 earthquake and the 11th september 2001 attacks the impact of the asian financial crisis was relatively mild this paper finds that any impact on safety whether domestic or international negatively affects tourism demand the impact of financial crises on tourism demand is less significant ensuring the safety and health of tourists is the key to maintain demand for inbound tourism

when demand drops and prices rise tourist packages in the balearic islands during the economic crisis abstract the aim of this paper is to analyse the effects of the crisis on the prices of package holidays to the balearic islands sold by a sample of british and german tour operators three alternative price indexes are calculated the results show that tour operators have reacted by using market strategies other than pricing aimed at boosting their revenue even though they do not push up the number of tourists thus protecting the tour operators financial yield

a system of equations model of uk tourism demand in neighbouring countries this paper uses a system of equations model to examine tourism demand during periods of destination country transition and integration into the wider international community the almost ideal demand system model is applied to the uk demand for tourism in the neighbouring destinations france spain and portugal spain and portugal are interesting cases as during the period under consideration they experienced a process of transition from economies with characteristics typical of developing countries only entering the world bank s industrialized countries classification in the 1980s the paper examines the evolution of tourism demand during these countries transition from developing to developed status consideration of france as a neighbouring destination also allows the behaviour of tourism demand to be compared between relatively rich and poor countries the results show the extent to which the cross country behaviour of demand becomes more or less similar over time with respect to changes in ex

prices prices and prices a study in the airline sector abstract this article creates and empirically analyzes a dynamic pricing framework the model includes the main theories on prices in the literature and dynamically analyzes how companies change their pricing policies according to different circumstances through the use of regressions the article shows the relative long and short term impact on pricing equations strategic versus operational matters and on production conditions versus demand perspectives in the setting of operational prices in addition it highlights how the proportions of these pricing perspectives change in the airline sector according to the effect of the environment on the configuration of the strategy determined by monthly and hourly seasonality and also according to the nature of this competitive strategy determined by the characteristics of the company and the destination airport the results confirm our framework and show how firms combine the different perspectives in their pricing strategies

is the fed too timid monetary policy in an uncertain world estimates of the taylor rule using historical data from the past decade or two suggest that monetary policy in the u s can be characterized as having reacted in a moderate fashion to output and in

the impact of globalization on small and medium enterprises new challenges for tourism policies in european countries abstract the pressure of globalization is having a major impact on the small and medium enterprises smes of the european tourism industry globally acting suppliers decreasing transportation costs and emerging new destinations have put pressure on the european smes in traditional destinations as many european countries are economically very dependent on tourism a need for effective policy support arises the paper focuses on the questions what could be done to restore the european tourism industry as a growth engine for income and employment as well as what roles should the government sector and the private sector respectively play the implementation of flexible operating network alliances and holistic destination management techniques geared to meet post modern tourism demand are suggested to alleviate the impacts of globalization on smes

tourism demand for italy and the business cycle this study provides a strategy for modelling the effect of the business cycle on tourism demand under the rationale that tourism cycles are heavily influenced by lagged effects of the overall business cycle using quarterly data on overnight stays in italian hotels both domestic and inbound between 1985 and 2004 we adopt a structural time series approach to evaluate two alternative models the first with a latent cycle component lcc and the second based on specific economic explanatory variables xcv the two models are compared in terms of explanatory power best fit residual diagnostics and forecasting ability the results show similar performances the policy implication is that the xcv model can be used for calibrating countercyclical interventions in tourism policy

climate in the region of origin and destination choice in outbound tourism demand abstract this paper describes the relationship between regional climate in the home area and the choice of taking holidays in the region of origin or abroad this decision is simultaneously estimated with a bivariate probit model the study combines the socioeconomic characteristics of european households with information on the region of residence such as climate which is defined according to a new annualized climate index the estimated probabilities are analysed using gis and nonparametric techniques the results of modelling support the hypothesis that the climate in the region of residence is a strong determinant of holiday destination choice they show that residents in regions with better climate indices have a higher probability of travelling domestically and a lower probability of travelling abroad

quantifying regional economic impacts of co2 intensity targets in china we acknowledge the support of the ministry of science and technology of china through the institute for energy environment and economy at tsinghua university and the support from graduate school of tsinghua university which is supporting zhang da s doctoral research as a 22 visiting scholar at the massachusetts institute of technology we are also grateful for the support provided by rio tinto china and social science key research program from national social science foundation china of grant no 09 zd029 we further acknowledge the support of eni s p a icf international and shell founding sponsors of the china energy and climate project for supporting this model development work we would further like to thank dr john reilly dr sergey paltsev dr kyung min nam dr henry chen paul kishimoto and tianyu qi at joint program on the science and policy of global change and participants in the annual meeting of china energy and climate project and ecomod 2012 conference for helpful comments and discussion 23

modelling the domestic and foreign tourist arrivals to tamil nadu india in recent years due to the indian federal government s and tamil nadu state government s various initiatives and promotional activities foreign and domestic tourist arrivals in tamil nadu are on the increase this article aims to model the monthly tourist arrivals foreign as well as domestic in tamil nadu for monthly time series data during the period 1998 to 2002 using univariate time series models as both time series show strong seasonal patterns we also investigate the possibility of seasonal unit roots in the domestic and foreign tourist arrivals series the results show that significant growth in domestic and foreign arrivals takes place during the months december to january growth rate for domestic tourist arrivals is positive during april and may but is negative for the foreign tourist arrivals during april and insignificant during may such information would be very useful to the tamil nadu government and the tourism industry in maximizing the usage of available tourist spot infrastructure

british tourism demand elasticities in mediterranean countries we use the almost ideal demand system aids model developed by deaton and muellbauer 1980 to estimate tourism demand elasticities for a number of mediterranean countries cyprus greece italy malta portugal spain and turkey in relation to tourists originating from the united kingdom during the period 1963 to 2009 using the restrictions imposed by theory we find that the model is able to explain developments in market shares reasonably well despite the large and at times sudden changes in market shares over the sample period our share estimates indicate that while spain and portugal managed to keep a stable market share over time malta and especially italy lost market share to cyprus greece and turkey overall we observe that italy and spain have the lowest own price elasticities whereas greece portugal spain and turkey are expenditure inelastic holiday destinations we also improve over the traditional treatment of the aids model in the literature by studying the stability of the estimat

remodeling international tourism demand old theory and new evidence abstract the purpose of this study is to advance the tourism demand theory by excluding simultaneous effects of exchange rates and prices in empirical models formulating an alternative pricing modus operandi consistent with recent research in the area and demonstrating the efficacy of the use of an industrial production index ipi as a proxy for income a panel fully modified ordinary least squares fmols method is employed to estimate the inbound tourism demand for turkey study findings suggest that the inclusion of exchange rates and prices as mutually exclusive components can be misleading the ipi is not a good proxy for income and country specific coefficients need to be analyzed to accurately explain determinants of tourism demand for countries in the panel

alternative designs for tariffs on embodied carbon a global cost effectiveness analysis in the absence of effective world wide cooperation to curb global warming import tariffs on embodied carbon have been proposed as a potential supplement to unilateral emissions pricing we consider alternative designs for such tariffs and analyze their effects on global welfare within a multi region multi sector computable general equilibrium cge model of global trade and energy our analysis suggests that the most cost efficient policy could be region specific tariffs on all products based on direct plus electricity emissions in the end however the potential cost savings through carbon tariffs must be weighed against the administrative costs as well as legal issues and political considerations

a micro analysis of business travel demand this study tests two hypothesis 1 that tax deductibility and the dual benefit nature of goods on the business pleasure borderline increases the demand for business travel and 2 that this dual benefit decreases price elasticity the study uses expenditure microdata and contrasts the behaviour of business travellers and pleasure travellers both groups are assumed to have indentical tastes but the expenditure behaviour of business travellers is modified by the role of the business trip as a factor of production the linear expenditure system les allocation model is applied to expenditures on individual goods at a particular tourist destination business travellers are shown to have higher expenditures than pleasure travellers for food lodging and local transportation minimum quantities estimated by the les are also higher for business travellers uncompensated price elasticities of business travellers are significantly smaller than that of pleasure travellers for local transportation clothing a

economies of scale in the australian tourism industry the measurement of economies of scale in the tourism industry has not been done to this point as tourism is not a specific industry according to international statistical standards among many industries related to tourism four sectors accommodation transport retail trade and recreational services across six states and two territories from 1997 to 2007 are studied as they contribute nearly 70 of tourism output in australia by comparing regression results from the cobb douglas c d production function and the translog production function we find that there is evidence of increasing returns in transport retail trade and recreational services at the industry level however accommodation is characterized by constant returns to scale at the industry level as accommodation is responsible for the biggest share of tourism output this suggests that overall the tourism sector is not characterized by increasing returns we also find that the degrees of returns to scale from the c d and translog product

tourism demand modelling and forecasting a review of recent research abstract this paper reviews the published studies on tourism demand modelling and forecasting since 2000 one of the key findings of this review is that the methods used in analysing and forecasting the demand for tourism have been more diverse than those identified by other review articles in addition to the most popular time series and econometric models a number of new techniques have emerged in the literature however as far as the forecasting accuracy is concerned the study shows that there is no single model that consistently outperforms other models in all situations furthermore this study identifies some new research directions which include improving the forecasting accuracy through forecast combination integrating both qualitative and quantitative forecasting approaches tourism cycles and seasonality analysis events impact assessment and risk forecasting

the strategic role of tourism trade fairs in the new age of tourism abstract tourism trade fairs have played an important role in the industry facilitating the sales function of companies in the fordian phase of tourism in the new age of tourism their mission is more complex they contribute systematically to the competitiveness of companies and clusters strengthening their information function this article examines the implications for tourism company policies in this new age as well as the current and potential contribution of tourism trade fairs to improving each one of porter s competitive factors demand input factors supporting industry and company structure finally the article recommends strategic guidelines for the development of tourism trade fairs and for optimizing participation in these events

consumer behaviour theory and empirical evidence a survey this survey is designed to emphasize the relationship between empirical a nd theoretical considerations in the analysis of consumer behavior a lthough it focuses primarily on analysis at the individual or micro l evel it tries where possible to draw implications for the estimati on of aggregate relationships the importance of micro level analysis stems from the rapid expansion in available panel and survey data se ts this development has generated its own theoretical and empirical issues many of which are raised in this survey copyright 1988 by royal economic society

international migration income taxes and transfers a welfare analysis abstract an important issue in public policy debates is the effect of international migration on welfare in source and host countries we address this issue by constructing a general equilibrium model of a two class source or host country each country produces many traded and non traded goods uses income taxes and distributes the tax receipts equally to all individuals the analysis examines the effects of permanent migration on class and national welfare we show among other things that marginal immigration hurts people already in the country regardless of whether or not non traded goods exist the presence of international capital mobility however may reverse the above result

monetary policy rules based on real time data this paper examines the magnitude of informational problems associated with the implementation and interpretation of simple monetary policy rules using taylor s rule as an example i demonstrate that real time policy recommendations differ considerably from those obtained with ex post revised data further estimated policy reaction functions based on ex post revised data provide misleading descriptions of historical policy and obscure the behavior suggested by information available to the federal reserve in real time these results indicate that reliance on the information actually available to policy makers in real time is essential for the analysis of monetary policy rules

forecasting long haul tourism demand for hong kong using error correction models forecasting accuracy is particularly important when forecasting tourism demand on account of the perishable nature of the product this study compares a range of forecasting models in the context of predicting annual tourist flows into hong kong from the major long haul markets of the us the uk germany and major short haul markets of china japan and taiwan econometric forecasting models considered included error correction models ecms based on permanent income life cycle pi lc hypothesis pi lc ecm and alternative cointegration approaches engle and granger 1987 johansen 1988 and ordinary least square ols approaches both autoregressive integrated moving average arima and no change model hereafter naive models are used as a benchmark time series model for accuracy comparisons it was hypothesized that pi lc ecm is a better forecasting model particularly for long haul tourism demand the objective of this article is to investigate whether the application of pi lc ecm could improve the

how can china reach its co2 intensity reduction targets by 2020 a regional allocation based on equity and development in late 2009 the chinese government committed to cut its carbon dioxide emissions per unit of gross domestic product gdp by 40 to 45 of 2005 levels by 2020 this has raised the issue of how to allocate the co2 reduction target regionally to meet the national reduction target to meet this objective the following aspects may be taken into consideration equity principles common but differentiated responsibilities intensity reduction target fulfillment and economic difference and reduction potential among provinces this paper selects per capita gdp accumulated fossil fuel related co2 emissions and energy consumption per unit of industrial added value as indicators for emission reduction capacity responsibility and potential respectively based on these three indicators a comprehensive index is developed and an intensity allocation model constructed as decision makers may have different preferences when allocating the reduction burden we allocate different weights to the indicators analyzing the results using cluster analysis the following aspects may also be considered together with the national regional development strategy to determine how to share the burden the reduction potential of various regions implementation potential of the plans and promotion of a highly efficient low carbon economic development model

the demand for international tourism in the mediterranean region the paper studies the demand for international tourism in the mediterranean region first a review of the most important attempts to model econometrically the demand for international tourism in the past is given followed by a formal presentation of the proposed theoretical model in particular a version of the almost ideal demand system aids is adopted and a description of the variables involved and their sources together with the estimation procedure are provided the diagrammatic analysis performed contributes to a better understanding of the evolution of the dependent variable over time the results with respect to the expenditure as well as to the own and cross price elasticities may be regarded as econometrically satisfactory and a reasonable economic explanation is given

an econometric study on estimation of trade shares using the almost ideal demand system in the world link the objectives of this paper are to analyse the import shares by country using the world trade matrix data for 25 countries regions of the world various methods for the analysis of import or export shares are used in the literature but none of the studies has made use of the approach of an almost ideal demand system aids deaton and muellbauer 1980 the results based on aids for import shares are plausible and when maximizing behaviour is not assumed estimation of import share equations by ordinary least squares is possible in the aids approach import shares turn out to be a function of real value of imports and export prices of major competitors homogeneity and symmetry restrictions can be tested and estimation with constraints can conducted using fiml full information maximum likelihood or equivalent methods the paper presents results for three important countries regions namely the usa japan and the eec as importing country regions and for major suppliers to each country region the impo

leaving the countryside rural to urban migration decisions in china this paper employs a simple theoretical model of labor allocation within rural households given existing land arrangements in an attempt to explain why rural chinese do not fully participate in labor migration it first explores the mechanisms by which individual household and community characteristics affect the migration decision empirical results are then presented to substantiate the derived hypotheses the paper further explores the question of whether the migration decision is permanent by analyzing the responses of household consumption to income from migration excerpt

modelling us tourism demand for european destinations abstract an almost ideal demand system model is used to examine us demand for tourism in european destinations the model provides policy makers with useful information concerning the sensitivity of tourism demand to changes in relative prices exchange rates and expenditure the results show that price competitiveness is important for us demand for france italy and spain but is relatively unimportant for the uk france and italy are regarded as substitutes by us tourists as are spain and italy as us expenditure rises the market shares of spain and the uk decline while france and italy benefit the demand modelling and forecasting indicate that in the absence of a tourism price index the choice between alternative price indices does not have a significant effect on the results

monetary policy when potential output is uncertain understanding the growth gamble of the 1990s abstract t he fed kept interest rates low and essentially unchanged during the late 1990s despite a booming economy and record low unemployment these interest rates were accommodative by historical standards nonetheless inflation remained low how did the fed succeed in sustaining rapid economic growth without fueling inflation and inflationary expectations in retrospect it is evident that the productive capacity of the economy increased yet as events unfolded there was uncertainty about the expansion of the capacity of the economy and therefore about the sustainability of the fed s policy this paper provides an explanation for the success of the fed in accommodating growth with stable inflation in the late 1990s it shows that if the central bank is committed to reverse policy errors it makes because of unwarranted optimism inflation can remain in check even if the central bank keeps interest rates low because of this optimism in particular a price level target which is a simple way to model a commitment to offset errors can serve to anchor inflation even if the public does not share the central bank s optimism about shifts in potential output the paper shows that price level targeting is superior to inflation targeting in a wide range of situations the paper also provides econometric evidence that in contrast to earlier periods the fed has recently put substantial weight on the price level in setting interest rates moreover it shows that cpi announcement surprises lead to reversion in the price level finally it provides textual evidence that alan greenspan puts relatively more weight on the price level than inflation

monetary policy under model and data parameter uncertainty abstract empirical taylor rules are much less aggressive than those derived from optimization based models this paper analyzes whether accounting for uncertainty across competing models and or real time data considerations can explain this discrepancy it considers a central bank that chooses a taylor rule in a framework that allows for an aversion to the second order risk associated with facing multiple models and measurement error configurations the paper finds that if the central bank cares strongly enough about stabilizing the output gap this aversion leads to significant declines in the coefficients of the taylor rule even if the central bank s loss function assigns little weight to reducing interest rate variability furthermore a small degree of aversion can generate an optimal rule that matches the empirical taylor rule

an initial investigation into the impact of tourism on local budgets a comparative analysis of spanish municipalities abstract the spanish federation of municipalities has particularly since 2008 been vocal about a chronic deficit situation caused by high public expenditures in tourist areas within this context new strategies to increase revenues have been proposed including the introduction of tourist taxes this paper contributes to this debate by determining if tourism activity actually has a negative impact on local finances in spain to that end a comparative analysis of budget structures between tourism intensive and non tourism intensive municipalities is undertaken using data from more than 3200 local corporations for the years 2001 2010 the determinants of expenditures revenues and deficit per capita are identified using a linear regression the results indicate a direct relationship between tourism intensity and local deficits only in the smallest and largest municipalities while a beneficial effect is actually seen in the remainder of the sample in view of this evidence we recommend revising the existing regulations to allow for municipalities below 20 000 residents to be officially recognized as tourist municipalities so that they can benefit from that status in addition the option of introducing new tourist taxes should be more restricted in scope and depend upon further evidence of possible cost inefficiency in the affected municipalities

tourism as a long run economic growth factor the spanish case this paper examines the role of tourism in the spanish long run economic development the tourism led growth hypothesis is confirmed through cointegration and causality testing the results indicate that at least during the last three decades economic growth in spain has been sensible to persistent expansion of international tourism the increase of this activity has produced multiplier effects over time external competitivity has also been proved in the model to be a fundamental variable for spanish economic growth from the empirical analysis it can be inferred the positive effects on income that government policy in the adequacy of supply as well as in the promotion of tourist activity may bring about

a model of tourism destination choice a theoretical and empirical analysis abstract in recent years tourism has become one of the fastest growing sectors of the world economy and is widely recognised for its contribution to regional and national economic development the main aim of the paper is to propose a methodological framework within which the impact of characteristics of a tourism product on foreign travel can be captured and analysed this is achieved by combining the lancasterian product characteristics approach with the koppelman s consumer transportation model within the proposed model the characteristics of the tourism product destination including quality of service advertising and political instability are combined to generate a perception feeling regarding the tourism destination in the mind of the tourists in order to measure these perceptions feelings and hence develop a preference ordering the model is estimated by utilising a conditional logit analysis the analysis is based on primary data collected from tourists visiting cyprus the conditional logit model generates the probability of revisit given the characteristics of tourists and the cyprus tourism product the paper extends further the lancaster product characteristics framework as applied to tourism by rugg rev econom stat 55 1 1973 64 morley ann tourism res 19 1992 250 and papatheodorou ann tourism res 28 2001 164 by including the neglected but from any viewpoint important political instability characteristic that is attached to the tourist product of cyprus the inclusion of product characteristics attributes in tourism analysis appear to strongly contribute towards the better understanding of travel choice behaviour

analysis of the economic impact of different chinese climate policy options based on a cge model incorporating endogenous technological change abatement cost is the main concern for climate change mitigation and the key factor for mitigation cost is technological change this study established an integrated economic energy environmental dynamic computable general equilibrium cge model representing endogenous technological change for china s climate change policy analysis this study analyzed and compared the economic impact of different approaches to mitigation commitments as well as the potential role of technological change in the formulation of mitigation targets and commitments taking into account china s climate policy making needs based on the current international climate negotiation process the results show that absolute emission limits similar to the kyoto protocol will seriously impede the future economic development of china while the impact of an 80 reduction in carbon intensity forecast for 2050 based on the 2005 level is relatively small technological change can promote economic growth improve energy efficiency and reduce carbon intensity per unit of output through the substitution of production factors consequently it can reduce marginal abatement cost and related gdp loss by mitigation at the same time it can increase mitigation potentials and extend the emission reduction amount showing that consideration of the impact of technological change when deciding the emission reduction targets is necessary

interprovincial migration and the stringency of energy policy in china the authors thank eni s p a icf international shell international limited and the french development agency afd founding sponsors of the china energy and climate project we also gratefully acknowledge the support of the energy information administration at the u s department of energy we are also thankful for support provided by the ministry of science and technology of china the national development and reform commission and rio tinto china we further gratefully acknowledge the financial suppo rt for this work provided by the mit joint program on the science and policy of global change through a consortium of industrial sponsors and federal grants this work is also supported by the doe integrated assessment grant de fg02 94er61937

a cge assessment of singapore s tourism policies abstract the extraordinary performance of the singapore tourism industry is attributed among other factors to the active tourism policies of the singapore government but the effectiveness of singapore tourism policies has never been quantified by building a cge model for the singapore economy with an emphasis on tourism and utilising the recently published singapore input output tables and tourism survey data this study has gauged economic impact of singapore inbound tourism and the effectiveness of singapore tourism policies based on the simulated macroeconomic and sectoral effects the modelling results show that in terms of both real gdp and total tourism expenditure tourism gst deduction is the most effective policy followed by the tourism activity subsidy policy the tourism industry subsidy policy is proven to be the least effective since different tourism policies have different strengths and weaknesses a balanced and focused approach to tourism policy is suggested for policy makers

income and the substitution pattern between domestic and international tourism demand this article analyses the role of income in the decision of participating in the tourism demand within 1 year the tourists who are participating can travel to domestic destinations only abroad destinations only or to both of them such a substitution pattern is modelled using a bivariate probit model the analysis is carried out to the regional level using a survey conducted in 15 european eu 15 countries in addition to the traditional socioeconomic variables the analysis adds new variables to the outbound tourism demand modelling such as the attributes of the place of residence the results show that tourism demand is income elastic however there are marked differences in the income elasticities of the probabilities of travelling domestically or abroad above certain income threshold the substitution pattern between destinations takes part the probability of travelling domestically only remains constant whereas the probability of travelling abroad keeps growing additionally the article prov

the price competitive position of mediterranean countries in tourism evidence from the thomson brochure abstract tourism in the mediterranean region is highly dependent on the few large mass market tour operators situated in the north european tourist originating countries price competition is intense both between the tour operators and between the mediterranean countries themselves this paper uses the hotel package prices listed in the thomson summer and winter brochures to develop relative price indexes of each mediterranean country with respect to the mediterranean average indexes are developed in the 3 star 4 star 5 star 7 nights and 14 nights half board holiday packages the prices in the thomson brochure can be regarded as a unified internally consistent set of price data compiled by the largest uk tour operator and offered to uk tourists desiring a thomson summer holiday the change through time of the competitive relative price ranking of hotels regions and countries listed in the thomson brochure may be regarded as an important competitive indicator by industry operators and national policy makers concerned about tourism development

learning about monetary policy rules abstract we study macroeconomic systems with forward looking private sector agents and a monetary authority that is trying to control the economy through the use of a linear policy feedback rule we use stability under recursive learning a la evans and honkapohja learning and expectations in macroeconomics princeton university press princeton new jersey 2001 as a criterion for evaluating monetary policy rules in this context we find that considering learning can alter the evaluation of alternative policy rules

indicator variables for optimal policy the optimal weights on indicators in models with partial information about the state of the economy and forward looking variables are derived and interpreted both for equilibria under discretion and under commitment an example of optimal monetary policy with a partially observable potential output and a forward looking indicator is examined the optimal response to the optimal estimate of potential output displays certainty equivalence whereas the optimal response to the imperfect observation of output depends on the noise in this observation

academic tourism demand in galicia spain the last few decades have witnessed a dramatic increase in the mobility of higher education students when fulfilling certain conditions this type of mobility can actually be considered a type of tourist activity this paper justifies the choice of the term academic tourism to describe such a form of tourism further to this its primary purpose is to identify the main determinants that drive the demand of academic tourism in galicia an empirical analysis has been carried out using a dynamic panel data model by a generalized method of moments gmm contrary to what can be observed in other types of tourism the results suggest that academic tourism depends mainly on determinants that are not strictly economic namely the relevance of the habits and preferences of students the potential for differential attractiveness of the university of santiago de compostela and the significant impact of the erasmus programme in light of these results policy implications are then discussed

competition in tourism among the mediterranean countries this paper examines tourism competition among the mediterranean countries with particular emphasis on greece the estimated model includes as explanatory variables an income index a price index of the host country a price index of the competitors spain portugal and italy and exchange rate the results show that the main determinants of greece s tourism demand are both price indexes and exchange rate they also show that spain seems to be greece s main competitor

indicator variables for optimal policy under asymmetric information the optimal weights on indicators in models with partial information about the state of the economy and forward looking variables are derived and interpreted both for equilibria under discretion and under commitment the private sector is assumed to have more information about the state of the economy than the policymaker certainty equivalence holds for the optimal reaction function in state space form t he coefficients are independent of the degree of uncertainty about the state of the economy however in the case of commitment certainty equivalence does not hold for the reaction function in integrative form the policy instrument cannot be written as a distributed lag of past estimates of past states of the economy instead optimal policy will generally depend on new estimates of past states of the economy and in ways that depend on the information structure furthermore the usual separation principle does not hold since the estimation of the state of the economy is not independent of optimization and is in general quite complex we present a general characterization of optimal filtering and control in settings of this kind and discuss an application of our methods to the problem of the optimal use of real time macroeconomic data in the conduct of monetary policy

distributional impacts of carbon pricing a general equilibrium approach with micro data for households article i nfo many policies to limit greenhouse gas emissions have at their core efforts to put a price on carbon emissions carbon pricing impacts households both by raising the cost of carbon intensive products and by changing factor prices a complete analysis requires taking both effects into account the impact of carbon pricing is determined by heterogeneity in household spending patterns across income groups as well as heterogeneity in factor income patterns across income groups it is also affected by precise formulation of the policy how is the revenue from carbon pricing distributed as well as the treatment of other government policies e g the treatment of transfer payments what is often neglected in analyses of policy is the heterogeneity of impacts across households even within income or regional groups in this paper we incorporate 15 588 households from the u s consumer and expenditure survey data as individual agents in a comparative static general equilibrium framework these households are represented within the mit usrep model a detailed general equilibrium model of the u s economy in particular we categorize households by full household income factor income as well as transfer income and apply various measures of lifetime income to distinguish households that are temporarily low income e g retired households drawing down their financial assets from permanently low income households we also provide detailed within group distributional measures of burden impacts from various policy scenarios

towards new tourism policies the importance of environmental and sociocultural factors abstract unrestricted tourism growth could lead to the positive economic effects of tourism being outweighed by significant social and environmental disadvantages which could in turn translate the economic benefits into disadvantages this process derives not only from tourism effects per se but also from changes in the social structure this article calls for not merely economic and technical adjustments in policies but for a fundamental political transformation in the conception of tourism and recreation

an applied analysis of brand demand structure the demand literature is concerned with the optimal allocation of expenditure at varied but usually high levels of commodity aggregation much less aggregation however is required for business applications in applied business settings interest centres upon the different brands of the same commodity because policy formulation takes place at the level of the individual brand this paper considers application of formal demand analysis to brand demand data a theoretically plausible demand system is invoked to describe inter brand allocation of expenditure test restrictions imposed by economic theory and yield empirically determined insights into brand demand structure

an analysis of consumption behaviour of foreign tourists in ireland the objective of this article is to analyse the consumption behaviour of foreign tourists in ireland based on the almost ideal demand system five demand systems are estimated four representing the major source markets of tourists to ireland namely from britain north america mainland europe and rest of the world and one aggregate model based on a pooled sample each system included six commodity aggregates representing the major consumables of tourists estimated models were statistically significant and the derived elasticities are theoretically consistent and empirically plausible while there are some variations in the consumption patterns of tourists from different source markets reflecting differences in consumer preferences and consumption habits in general tourist demand for the various irish tourism goods and services is found to be price inelastic this finding is consistent with a priori expectations as tourists are obliged to consume whatever is available at the destination they visit

assessment of china s climate commitment and non fossil energy plan towards 2020 using hybrid aim cge model china made a commitment in copenhagen to reduce its carbon dioxide emissions per unit of gdp from 40 to 45 compared with the 2005 level by 2020 and is determined to vigorously develop non fossil fuels this study analyzes the effects and impacts of policies that could help to achieve china s copenhagen commitments with a hybrid static cge model in which the electricity sector is disaggregated into 12 generation technologies four scenarios are developed including the reference scenario a the reference scenario b and two carbon constraint scenarios the results show that carbon intensity in terms of gdp will fall by 30 97 between 2005 and 2020 in the reference scenario a and will be reduced further by 7 97 if china s targeted non fossil energy development plans can be achieved in the reference scenario b however the rest of the 40 45 target must be realized by other measures such as carbon constraint it is also observed that due to carbon intensity constraints gdp loss would be from 0 032 to 0 24 compared to the reference scenario b and co2 emission reductions are due mainly to decreases in coal consumption in the electricity sector and manufacturing sector

war terror and the tourism market in israel a supply and demand model of the israeli hotel industry is developed distinguishing between its domestic and foreign sectors model simulations are employed to examine the impacts of war and terrorist incidents on tourist activity and hotel revenues foreign demand for israeli hotel stays is highly price elastic and income inelastic and moderately sensitive to terrorist events domestic demand is price inelastic income elastic and terror insensitive in the wake of terror attacks hotels supply or minimum prices to israeli tourists shift downward reducing local market prices and encouraging more local tourism however the magnitude of these shifts is minor and the local market thus provides little buffer for dropoffs in foreign tourism by permitting excess capacity in such fashion hotels respond rationally to the price inelasticity of local demand

an econometric study of tourism demand the aids model of us and european tourism in mediterranean countries the almost ideal demand system aids model was used to estimate tourism expenditure allocation by us and west european countries among a range of mediterranean destinations the approach has the advantage of an explicit basis in consumer expenditure theory and by modelling the changes in the budget shares of expenditure among destinations provides new information relative to that provided by the traditional single equation approach the estimated model was econometrically satisfactory although symmetry and homogeneity were rejected in line with the findings of past studies of consumer demand the expenditure elasticities demonstrated considerable differences in tourism demand preferences between origin countries and between traditional and newly developing destinations the own and cross price elasticities indicated the importance of effective prices in determining the allocation of expenditure among destinations

a numerical simulation analysis of hukou labour mobility restrictions in china abstract we use numerical simulation methods to analyze the hukou system of permanent registration in china which many believe has supported growing relative inequality over the last 20 years by restraining labour migration both between the countryside and urban areas and between regions and cities our aim is to inject economic modelling into the debate on sources of inequality in china which thus far has been largely statistical we first use a model with homogeneous labour in which wage inequality across various geographical divides in china is supported solely by quantity based migration restrictions urban rural areas rich poor regions eastern central and western non coastal zones eastern and central western development zones eastern central western zones more disaggregated 6 regional classifications and an all 31 provincial classification we calibrate this model to base case data and when we remove migration restrictions all wage and most income inequality disappears results from this model structure points to a significant role for hukou restrictions in supporting inequality in china we then present a further model extension in which urban house price rises retard rural urban migration the impacts of removing hukou restrictions on migration are smaller but are still significant finally we modify the model to capture labour productivity differences across regions calibrating the modified model to estimates of both national and regional gini coefficients removal of migration barriers is again inequality improving but less so

the effect of urbanization on energy use in india and china in the ipets model abstract urbanization is one of the major demographic and economic trends occurring in developing countries with important consequences for development energy use and well being yet it is only beginning to be explicitly incorporated in long term scenario analyses of energy and emissions we assess the implications of a plausible range of urbanization pathways for energy use and carbon emissions in india and china using the integrated population economy technology science ipets model a computable general equilibrium cge model of the global economy that captures heterogeneity in household types within world regions and into which we have introduced income effects on household consumption preferences we find that changes in urbanization have a somewhat less than proportional effect on aggregate emissions and energy use a decomposition analysis demonstrates that this effect is due primarily to an economic growth effect driven by the increased labor supply associated with faster urbanization the influence of income on household consumption is strong and indicates a potentially rapid transition away from traditional fuel use and toward modern fuels such as electricity and natural gas results also indicate important directions for future work including the implications of alternative types and driving forces of urbanization over time a better understanding of possible changes in consumption preferences associated with income growth and the urbanization process and modeling strategies that can produce disaggregated household consumption outcomes within a cge framework

the energy and co2 emissions impact of renewable energy development in china the authors are grateful for the support provided by the national key technology r d program from ministry of science and technology of grant no 2012bac20b07 we acknowledge the support of the national key technology r d program and the institute for energy environment and economy at tsinghua university which is supporting tianyu qi s doctoral research as a visiting scholar at the massachusetts institute of technology we acknowledge the support of eni icf and shell initial founding sponsors of the china energy and climate project this consortium of sponsors has provided support for researchers in the mit joint program to engage in a five year program of research focused on china none of the sponsoring organizations played a role in the study design collection analysis or interpretation of the data used for this study nor did they influence our decisions to submit the article for publication and all errors are our own

exploring price and non price decision making in the uk package tour industry insights from small scale travel agents and tour operators abstract the emerging literature on the uk package tour industry has drawn upon diverse academic disciplines each carrying different methodological presuppositions underplayed is the intrinsic context within which tourism providers operate this paper presents the results of a questionnaire research investigation to generate practitioners insights into the competitive behaviour of the industry in the uk such insights are central in an understanding of the perceptions and processes at work oligopoly behaviour appears to be present amongst both large company groupings and small enterprises the exploratory analysis suggests the need to re emphasise the behavioural nature of oligopoly further the tourism industry shares this characteristic with manufacturing previously assumed to be widely different

post fordism and flexibility the travel industry polyglot abstract theorists argue that leisure and travel related activities have become increasingly commodified reflecting the broader evolution of a postmodern culture of consumption this paper argues that these developments have produced a travel industry complex characterized by a polyglot of varying production processes each placing a premium on flexible forms of accumulation focusing on certain key sectors of the travel industry the paper examines how partly because of new information technologies each element of the travel industry polyglot appears to have been affected by flexible based production strategies such as the externalization of ancillary services the development of interfirm strategic alliances and sophisticated product differentiation through brand segmentation the paper ends with a call for in depth empirical investigations to help develop a superior understanding of how flexible production techniques affect the various components comprising the travel industry

an analysis on the short term sectoral competitiveness impact of carbon tax in china abstract market based instruments particularly carbon tax have recently drawn the attention of chinese government by their cost effective contribution to the achievement of china s climate targets most of the recent policy proposals have focused on its long term impact however particularly for policy makers both long term and short term effects of carbon tax would be necessary when determining tax rates we provided a detailed analysis of short term impacts of carbon tax on sectoral competitiveness in this paper we divided china s economy into 36 sectors based on its 2007 input output table in order to examine the ratio of carbon tax added costs to sector gdp we were thus able to determine the impact level of a carbon tax on each sector we then divided the sectoral trade impact into domestic competitiveness with regards to foreign imported products and international competitiveness external to the chinese domestic market we found that a high tax level 100 yuan t co2 may necessitate compensatory measures to certain highly affected industries and that a low tax rate 10 yuan t co2 would generate few competitiveness problems for all industries and may therefore be considered as an appropriate starting point

estimates of energy subsidies in china and impact of energy subsidy reform abstract for a transitional economy such as china some energy subsidies are reasonable and sometimes even necessary for achieving social goals however with rising energy prices and environmental concerns we see conflicts emerging between energy subsidies energy demand supply fundamentals and climate change considerations energy subsidies have important implications for sustainable development through their effects on energy use efficiency and the choice of fuel source this paper applies the price gap approach to estimate china s energy subsidies results indicate that china s energy subsidies amounted to cny 356 73 billion in 2007 equivalent to 1 43 of gdp subsidies for oil products consumption are the largest followed by subsidies for the electricity and coal sectors furthermore a cge model is used to analyze the economic impacts of energy subsidy reforms our findings show that removing energy subsidies will result in a significant fall in energy demand and emissions but will have negative impacts on macroeconomic variables we conclude that offsetting policies could be adopted such that certain shares of these subsidies are reallocated to support other sustainable development measures which could lead to reducing energy intensity and favoring the environment

an empirical analysis of the influence of macroeconomic determinants on world tourism demand abstract this paper considers three econometric models to determine the relationship between macroeconomic variables and tourism demand tourism demand is measured by the inbound visitor s population and also by on the ground expenditures the database is an unbalanced panel of 218 countries over the period 1995 2012 there is evidence that an increase in the world s gdp per capita a depreciation of the national currency and a decline of relative domestic prices do help boost tourism demand the world s gdp per capita is more important when explaining arrivals but relative prices become more important when we use expenditures as the proxy for tourism demand we cannot reject the hypothesis of a relative prices unitary elasticity of expenditures additionally we have partitioned our data by income level and by continent results are robust in the first partition but less robust in the second although the main conclusions still hold finally we draw policy implications from our findings

natural gas pricing reform in china getting closer to a market system the authros are thankful to industry representatives in china shell cnpc for their valuable contribution regarding natural gas information the mit joint program on the science and policy of global change where the authors are affiliated is supported by the u s department of energy office of science under grants de fg02 94er61937 de fg02 08er64597 de fg02 93er61677 de sc0003906 de sc0007114 xeu 0 9920 01 the u s department of energy oak ridge national laboratory under subcontract 4000109855 the u s environmental protection agency under grants xa 83240101 pi 83412601 0 rd 83427901 0 xa 83505101 0 xa 83600001 1 and subcontract uta12 000624 the u s national science foundation under grants ags 0944121 efri 0835414 iis 1028163 eccs 1128147 arc 1203526 ef 1137306 ags 1216707 and ses 0825915 the u s national aeronautics and space administration under grants nnx06ac30a nnx07ai49g nnx11an72g and sub agreement no 08 sfws 209365 mit the u s federal aviation administration under grants 06 c ne mit 09 c ne mit agmt no 4103 30368 the u s department of transportation under grant dtrt57 10 c 10015 the electric power research institute under grant ep p32616 c15124 ep p8154 c4106 the u s department of agriculture under grant 58 6000 2 0099 58 0111 9 001 and a consortium of 35 industrial and foundation sponsors for the complete list see http globalchange mit edu sponsors all

estimating the gravity model without gravity using panel data this article examines the effects of zero trade on the estimation of the gravity model using both simulated and real data with a panel structure which is different from the more conventional cross sectional structure we begin by showing that the usual log linear estimation method can result in highly deceptive inference when some observations are zero as an alternative approach we suggest using the poisson fixed effects estimator this approach eliminates the problems of zero trade controls for heterogeneity across countries and is shown to perform well in small samples

tests of restrictions in large demand systems abstract this paper compares some asymptotic tests of linear restrictions using exact results and monte carlo methods in systems which contain the same regressors in each equation it is found that under a variety of conditions a statistic suggested by deaton provides a better approximation to the true distribution in small sample situations than the wald likelihood ratio or lagrange multiplier tests

tourism and economic development a survey this article surveys the literature on tourism and economic development identifying the contribution that tourism can make to development including foreign currency income and employment and the costs that it entails single equation and system of equations models for estimating tourism demand are provided indicating developing countries potential to benefit from increasing expenditure on tourism but their susceptibility to deterioration in price competitiveness the main sectors of tourism supply transportation tour operators travel agents and accommodation are examined and the importance of cross country integration between firms is highlighted the article argues that many of the problems associated with the use of environmental resources for tourism stem from market failure and it considers methods for increasing sustainably the returns from them

elasticities in aids models comment green and alston have written two articles 1990 1991 for the journal on the correct method of calculating elasticities for the linear approximate almost ideal demand system la aids their articles are a departure from the typical approach to the la aids the la aids is generally used to estimate the parameters of deaton and muellbauer s almost ideal demand system aids the elasticity formulae for the aids are known green and alston s formulae are relevant only if the la aids is treated as a system in its own right such a treatment has merit however after checking the implications of treating the la aids as a system in its own right we discover that the la aids itself lacks merit

modelling substitution between domestic and outbound tourism in australia a system of equations approach this study uses a system of equations approach to model the substitution relationship between australian domestic and outbound tourism demand a new price variable based on relative ratios of purchasing power parity index is developed for the substitution analysis short run demand elasticities are calculated based on the estimated error correction almost ideal demand systems the empirical results reveal significant substitution relationships between australian domestic tourism and outbound travel to asia the uk and the us this study provides scientific support for necessary policy considerations to promote domestic tourism further

sticky price models and durable goods the inclusion of a durable goods sector in sticky price models has strong and unexpected implications even if most prices are flexible a small durable goods sector with sticky prices may be sufficient to make aggregate output react to monetary policy as though most prices were sticky in contrast flexibly priced durables with sufficiently long service lives can undo the implications of standard sticky price models in a limiting case flexibly priced durables cause monetary policy to have no effect on aggregate output our analysis suggests that durable goods prices are the most relevant data for calibrating price rigidity jel e21 e23 e31 e52

economics of tourist s consumption behaviour some evidence from australia abstract this study analyses the consumption behaviour of international tourists from australia s four major source markets new zealand uk usa and japan a preliminary analysis of their consumption expenditures reveals intriguing similarities as well as diversities in consumption patterns these are sought to understand in terms of the utility maximising framework in which observed differences in prices and incomes play a key role based on the neoclassical economic theory of consumer behaviour models incorporating five major components of tourist consumption accommodation food transport shopping and entertainment are estimated overall the level of tourist consumption is found to be highly sensitive to incomes but less sensitive to prices the low price sensitivity suggests tourists perceive the commodities as necessities and may also reflect their captivity at the destination masking the underlying true price sensitivities an important dimension underlying these findings is the possible lack of information about the destination leading to sub optimal consumption choices

what is wrong with taylor rules using judgment in monetary policy through targeting rules it is argued that inflation targeting is best understood as a commitment to a targeting rule rather than an instrument rule e ither ageneral targeting rule explicit objectives for monetary policy or a specific targeting rule a criterion for the forecasts of the target variables to be fulfilled essentially the equality of the marginal rates of transformation and substitution between the target variables targeting rules allow the use of judgment and extramodel information are more robust and easier to verify than optimal instrument rules and they can nevertheless bring the economy close to the socially optimal equilibrium