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

precautionary savings and self selection evidence from the german reunification experiment in the absence of complete insurance expected future income shocks lead prudent individuals to build up precautionary savings in order to avoid wide fluctuations in the consumption path the reaction of savings to expected future shocks is stronger the more risk averse an individual is risk aversion might influence not only the savings behavior of an individual facing a stochastic income path but it can also affect occupational choice in the first place in particular risk averse individuals might choose occupations that are associated with less risky income paths while less risk averse individuals might prefer occupations with higher income risk assessing the importance of self selection of individuals into occupations according to their risk aversion is difficult since risk aversion is usually unobserved yet failing to control for unobserved risk aversion in regressions of wealth on measures of labor income risk will lead to a bias if selfselection takes place since measures of labor income risk will be negatively correlated with the error term that is capturing the unobserved risk aversion this could lead to a rejection of the theory of precautionary savings even if individuals act according to the theory

revisiting the tourism led growth hypothesis for turkey using the bounds test and johansen approach for cointegration abstract this paper empirically revisits and investigates the tourism led growth tlg hypothesis in the case of turkey by employing the bounds test and johansen approach for cointegration using annual data from 1960 2006 although gunduz and hatemi j 2005 is the tourism led growth hypothesis valid for turkey applied economics letters 12 499 504 support the tlg hypothesis for turkey suggesting unidirectional causation from tourism to economic growth by making use of the leveraged bootstrap causality tests and ongan and demiroz 2005 the contribution of tourism to the long run turkish economic growth ekonomick casopis journal of economics 53 9 880 894 suggest bidirectional causality between international tourism and economic growth in turkey this study does not find any cointegration between international tourism and economic growth in turkey therefore unlike the findings of gunduz and hatemi j 2005 and ongan and demiroz 2005 this study rejects the tlg hypothesis for the turkish economy since no cointegration was found and error correction mechanisms plus causality tests cannot be run for further steps in the long term

individual risk attitudes measurement determinants and behavioral consequences this paper studies risk attitudes using a large representative survey and a complementary experiment conducted with a representative subject pool in subjects homes using a question asking people about their willingness to take risks in general we find that gender age height and parental background have an economically significant impact on willingness to take risks the experiment confirms the behavioral validity of this measure using paid lottery choices turning to other questions about risk attitudes in specific contexts we find similar results on the determinants of risk attitudes and also shed light on the deeper question of stability of risk attitudes across contexts we conduct a horse race of the ability of different measures to explain risky behaviors such as holdings stocks occupational choice and smoking the question about risk taking in general generates the best all round predictor of risky behavior

intertemporal consumption with directly measured welfare functions and subjective expectations euler equation estimation of intertemporal consumption models requires many often unverifiable assumptions these include assumptions on expectations and preferences we aim at reducing some of these requirements by using direct subjective information on respondents preferences and expectations the results suggest that individually measured welfare functions and expectations have predictive power for the variation in consumption across households furthermore estimates of the intertemporal elasticity of substitution based on the estimated welfare functions are plausible and of a similar order of magnitude as other estimates found in the literature the model favored by the data only requires cross section data for estimation

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

how important is precautionary saving we estimate how much of the wealth of a sample of psid respondents is held because some households face more income uncertainty than others we begin by solving a theoretical model of saving which we use to develop appropriate measures of uncertainty we then regress measures of wealth on our measures of uncertainty and find evidence that households engage in precautionary saving finally we simulate the wealth distribution that our empirical results imply would prevail if all households had the same uncertainty as the lowest uncertainty group we find that between 39 and 46 percent of wealth in our sample is attributable to the extra uncertainty that some consumers face compared to the lowest uncertainty group

tourism and economic growth nexus revisited a panel causality analysis for the case of the mediterranean region abstract tourism is perceived as an important source of foreign exchange that is used for financing economic growth this study offers a modern approach to tourism led growth and investigates the causal relationship between tourism and economic growth in the european asian and african countries that border the mediterranean sea the study uses panel data for the period 1998 2011 and adopts a panel granger causality analysis developed by dumitrescu and hurlin 2012 to assess the contribution tourism makes to economic growth in each country the results indicate that the direction of causality between tourism and economic growth depends on the country group and tourism indicator furthermore the european countries are better able to generate growth from tourism in the mediterranean region

the nature of precautionary wealth abstract this paper uses the panel study of income dynamics to provide some of the first direct evidence that wealth is systematically higher for consumers with predictably greater income uncertainty however the apparent pattern of precautionary wealth is not consistent with a standard parameterization of the life cucle model in which consumers are patient enough to begin saving for retirement early in life wealth is estimated to be far less sensitive to uncertainty than implied by that model instead our results suggest that over most of their working life time consumers behave in accordance with the buffer stock models of saving described in carroll 1992 1997 or deaton 1991 in which consumers hold wealth principally to insulate consumption against near term fluctuations in income

unemployment insurance and precautionary saving abstract models of precautionary saving imply that households will hold more assets when faced with greater income uncertainty however previous empirical studies of income uncertainty have produced somewhat mixed support for the precautionary saving hypothesis in this paper we note that differences in the state contingent income stream available to workers through the unemployment insurance ui program provides an excellent source of variation for testing the presence of a precautionary savings motive simulations of a stochastic life cycle model suggest that a ui system similar to the type currently in place in the u s can lead to a significant reduction in the assets accumulated by a median worker moreover there is considerable variation in the ui benefit schedules for workers living in different states in the u s which provides an exogenous source of variation for empirically testing the precautionary saving hypothesis we carry out this test using data on expected ui benefit replacement rates and financial assets held by households in the survey of income and program participation our empirical results are consistent with the predictions of the model and suggest that reducing the ui benefit replacement rate by 50 percent would increase gross financial asset holdings by 14 percent or 241 for the average worker we also find empirical evidence that this crowd out effect of ui on household saving is stronger for those facing higher unemployment risk and weaker for older workers both of which are implications from our precautionary saving model

precautionary savings a panel study theoretical literature shows that income uncertainty boosts saving yet empirical work is incomplete i test for the precautionary motive for saving using panel data knowing this motive s size is important for gauging the responsiveness of saving to government programs that reduce uncertainty and for comparison to other motives such as bequests most empirical studies of precautionary saving use either aggregate time series or cross sectional data which cannot capture the effects of individual income uncertainty i derive measures of total permanent and transitory income uncertainty from panel data the national longitudinal survey and find a strong precautionary motive a doubling of uncertainty increases the ratio of wealth to permanent income by 29

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

tourism development and economic growth a closer look at panels abstract this paper applies the new heterogeneous panel cointegration technique to re investigate the long run comovements and causal relationships between tourism development and economic growth for oecd and nonoecd countries including those in asia latin america and sub sahara africa for the 1990 2002 period on the global scale after allowing for the heterogeneous country effect a cointegrated relationship between gdp and tourism development is substantiated it is also determined that tourism development has a greater impact on gdp in nonoecd countries than in oecd countries and when the variable is tourism receipts the greatest impact is in sub sahara african countries additionally the real effective exchange rate has significant effects on economic growth finally in the long run the panel causality test shows unidirectional causality relationships from tourism development to economic growth in oecd countries bidirectional relationships in nonoecd countries but only weak relationships in asia our empirical findings have major policy implications

precautionary saving and subjective earnings variance abstract in this paper i examine a model of precautionary saving and i show that the fact that people may insure against income risk makes it difficult to evaluate the extent of precautionary accumulation by simply looking at the relationship between wealth and earnings variance i also argue that occupations may represent a bad proxy for income risk

debt deficits and inflation an application to the public finances of india abstract the paper studies the solvency of the indian public sector and the eventual monetization and inflation that would be implied by stabilization of the debt gnp ratio in the absence of changes in the primary deficit the nonstationarity of the discounted public debt suggests that indefinite continuation of the pattern of behavior reflected in the historical time series process is inconsistent with the maintenance of solvency this message is reinforced by the recent behavior of the debt gnp ratio and of the ratio to gnp of the sum of the primary budget surplus and seigniorage our estimates of the base money demand function suggests that even maximal use of the inflation tax would not be sufficient to restore solvency measures to reduce the primary deficit are therefore unavoidable

precautionary saving and consumption smoothing across time and possibilities this paper examines how aversion to risk and aversion to intertemporal substitution determine the strength of the precautionary saving motive in a two period model with selden kreps porteus preferences for small risks we derive a measure of the strength of the precautionary saving motive which generalizes the concept of prudence introduced by kimball 1990b for large risks we show that decreasing absolute risk aversion guarantees that the precautionary saving motive is stronger than risk aversion regardless of the elasticity of intertemporal substitution holding risk preferences fixed the extent to which the precautionary saving motive is stronger than risk aversion increases with the elasticity of intertemporal substitution we derive sufficient conditions for a change in risk preferences alone to increase the strength of the precautionary saving motive and for the strength of the precautionary saving motive to decline with wealth within the class of constant elasticity of intertemporal substitution constant relative risk aversion utility functions these conditions are also necessary

engines of tourism s growth an examination of efficacy of shift share regression analysis in south carolina abstract this study investigates the efficacy of the shift share regression analysis in examining the tourism industry s performance in a region tourism employment figures in the state of south carolina are used to model and compute the change of employment in sc using shift share regression and classical shift share analysis ssa these methods yield significantly different results challenging the reliability of the non statistical methods used in much of the relevant literature the results from the shift share regression analysis illustrate that the contribution of the tourism industry in sc to the tourism industry in the u s and to overall u s economy has decreased over the years contrary to the expectations sc as tourism dependent state is not specialized in the tourism industry and demonstrate competitive disadvantage while other industries appear to contribute more to the sc economy than the state s tourism industry proper development policies and strategies could help capitalize on state s tourism potential

the importance of business owners in assessing the size of precautionary savings abstract not properly accounting for differences between business owners and nonbusiness owners in studies of household wealth can lead to erroneous conclusions about the significance of different saving motives using data from the panel study of income dynamics from the 1980s and 1990s we show that within samples of both business owners and non business owners the amount of precautionary savings with respect to labor income risk is modest and accounts for less than 10 of total household wealth previous large estimates of the size of precautionary balances resulted from pooling these two groups together such pooling is inappropriate given that business owners face higher labor risk and accumulate more wealth than non business owners for reasons unrelated to precautionary motives

risk management and wealth accumulation behavior in france abstract recent theoretical saving models have placed greater emphasis on studying prudent behavior in the face of an uncertain future and have shown the influences of background risks on precautionary savings a prudent household exposed to a high future income risk will increase its savings empirical tests on recent french data insee patrimoine 97 show the relevance of subjective earnings variance to explain wealth accumulation but its contribution is not very large around 5

earnings expectations revisions and realizations during the spring and the fall of 1993 respondents to a national household survey were asked to report expectations of spring 1994 weekly earnings elicited in the form of subjective probabilities these data are potentially much more informative than are typical reports of economic expectations subjective probability distributions of future weekly earnings are estimated for each respondent based on his or her reports of a series of subjective probabilities this paper analyzes the cross sectional variation in expectations revisions of expectations between the spring and the fall of 1993 and the relationship between 1993 expectations and the distribution of spring 1994 earnings realizations generally positive findings on the validity of the data bode well for the prospects of eliciting expectations in future surveys

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

how does future income affect current consumption this paper tests a straightforward implication of the basic life cycle model of consumption that current consumption depends on expected lifetime income the paper projects future income for a panel of households and finds that consumption is closely related to projected current income but unrelated to predictable changes in income however future income uncertainty has an important effect consumers facing greater income uncertainty consume less the results are consistent with buffer stock models of consumption like those of deaton 1991 or carroll 1992a 1992b where precautionary motives greatly reduce the willingness of prudent consumers to consume out of uncertain future income

anticipated and unanticipated wage changes wage risk and intertemporal labor supply in this article i estimate how labor supply responds to anticipated wage growth unanticipated wage growth and wage risk using the 1989 93 panel section of the bank of italy survey of households income and wealth shiw which collects individual expectations of future wages the use of subjective expectations has several advantages first they provide information on the evolution and riskiness of future wages that the econometrician may never hope to observe moreover this avoids the need for specifying instruments for the growth rate of wages finally forecast errors can be directly controlled for thus avoiding inconsistency in short panels

is tourism an engine for economic recovery theory and empirical evidence abstract the purpose of this study is to examine the causal relationships between tourism development and economic growth for this purpose the dumitrescu and hurlin 2012 technique was employed to analyze the casual link between tourism development and economic growth in seven european countries the results showed that there is bidirectional causality between growth in tourism receipts and economic growth suggesting that economic growth and tourism development are interdependent and that tourism development stimulates economic growth and vice versa in these countries theoretical and practical implications are discussed within the realms of growth conservation feedback and neutrality hypotheses

disentangling insurance and information in intertemporal consumption choices the textbook version of the life cycle perma nent income hypothesis with no liquidity con straints predicts that consumption should react very mildly to unanticipated transitory income changes and very strongly to permanent ones this prediction has important policy implica tions in understanding the response of consum ers to tax rebates or increases that are made for stabilization purposes in recent years there has been a resurgence of interest in estimating these important parameters either using quasi experimental data such as randomization of the timing when tax rebate checks are received by households see david johnson jonathan parker and nicholas souleles 2006 or imposing struc tural restrictions on the stochastic income pro cess faced by consumers orazio attanasio and nicola pavoni 2008 richard blundell luigi pistaferri and ian preston 2008 jonathan heathcote kjetil storesletten and giovanni l violante 2007 giorgio primiceri and thijs van rens forthcoming the main objection of quasi experimental stud ies is that the results may be context specific the main problem with the second strand of the litera ture is that estimates of the response of consump tion to income shocks may confound two issues insurance and information on the one hand the estimate reflects the ability or lack thereof of the household to smooth consumption through a variety of channels such as self insurance gov ernment provided insurance credit markets or other informal mechanisms on the other hand the identification strategy requires the ability to statistically separate what is a shock from what is an anticipated event when seen from the point of

risk aversion wealth and background risk we use household survey data to construct a direct measure of absolute risk aversion based on the maximum price a consumer is willing to pay for a risky security we relate this measure to consumer s endowments and attributes and to measures of background risk and liquidity constraints we find that risk aversion is a decreasing function of the endowment thus rejecting cara preferences we estimate the elasticity of risk aversion to consumption at about 0 7 below the unitary value predicted by crra utility we also find that households attributes are of little help in predicting their degree of risk aversion which is characterized by massive unexplained heterogeneity we show that the consumer s environment affects risk aversion individuals who are more likely to face income uncertainty or to become liquidity constrained exhibit a higher degree of absolute risk aversion consistent with recent theories of attitudes toward risk in the presence of uninsurable risks jel d1 d8

the balance of trade and exchange rates theory and contemporary evidence from tourism abstract the purpose of this study is to investigate the effects of exchange rate depreciations and appreciations on the tourism trade balance specifically we employed linear and nonlinear autoregressive distributed lag ardl cointegration techniques to analyze the extent to which currency depreciations and appreciations affect the united states u s bilateral tourism trade with canada mexico and the united kingdom u k the results showed that the depreciation of the u s dollar subsequently improves the u s trade balance with all three trading partners however while the appreciation of the u s dollar deteriorates the u s bilateral tourism trade balance with canada and the u k it does not ultimately affect the u s bilateral tourism trade with mexico in the long term these results provide evidence contradicting the j curve theory supporting the postulations of the ml condition theoretical and policy implications are discussed within the realms of j curve theory marshall lerner ml condition international trade and tourism

the greek financial crisis growing imbalances and sovereign spreads abstract we discuss the origins of the greek financial crisis as manifested in the growing fiscal and current account deficits since euro area entry in 2001 we then extend a model typically used to explain risk premia to assess the extent to which credit ratings captured these premia next we estimate a cointegrating relationship between spreads and their long term fundamental determinants and compare the spreads predicted by this estimated relationship with actual spreads we find that spreads were significantly below what would be predicted by fundamentals from end 2004 up to the middle of 2005 by contrast since may 2010 actual spreads have exceeded predicted spreads by some 400 basis points

consumption beyond certainty equivalence this paper discusses the recent research on the consumption function that has attempted to relax the assumption of certainty equivalence while there remain many open questions both theoretical and empirical it is clear that the assumption of certainty equivalence can be misleading under more plausible specifications of preferences toward risk uncertainty lowers the level of consumption increases the expected rate of growth of consumption and increases the response of consumption to news about income moreover changes in the amount of uncertainty are a potentially important source of fluctuations in consumption this abstract was borrowed from another version of this item

growth distribution and the environment sustainable development in india abstract this paper considers prospects for improving growth and income distribution in india that are broadly sustainable in terms of macroeconomic and environmental constraints it first describes recent economic trends and the reform process using a simple framework which can incorporate political economy issues it then takes up environmental questions and the interaction of the environment and the macroeconomy based on this analysis the economy s medium term prospects are discussed under current policy and an alternative approach which is arguably more promising for growth distribution and the environment

how prudent are consumers using data from the consumer expenditure survey this paper presents a simple test that provides an explicit estimate of the parameter in the utility function that reflects the strength of the precautionary saving motive the coefficient of relative prudence the test yields a fairly precise estimate of a small precautionary motive in fact the estimate is too small to be consistent with widely accepted beliefs about risk aversion the presence of liquidity constrained households does not appear to explain this finding and there is some evidence that self selection of households into risky environments also cannot explain the results

precautionary savings of agents with heterogeneous risk aversion this article focuses on the estimation of the importance of the precautionary motive in the wealth accumulation decision we use the micro data set of the de nederlandsche bank dnb household survey dhs centerdata tilburg university a dutch household survey containing information on wealth a subjective measure of income uncertainty and subjective qualitative measures of risk aversion we find that only a small share of wealth is accumulated for the precautionary motive by the dutch households this share of wealth is constant across assets with different degrees of liquidity the economic downturn of the period 2008 to 2010 seems to affect risk attitudes and precautionary saving our findings also suggest that the more risk averse individuals are those who hold less savings

evaluating how predictable errors in expected income affect consumption this article studies whether anomalies in consumption can be explained by a behavioural model in which agents make predictable errors in forecasting income we use a micro data set containing subjective expectations about future income this article shows that the null hypothesis of rational expectations is rejected in favour of the behavioural model since consumption responds to predictable forecast errors on average agents who we predict are too pessimistic increase consumption after the predictable positive income shock on average agents who are too optimistic reduce the consumption

income variance dynamics and heterogeneity recent theoretical work has shown the importance of measuring microeconomic uncertainty for models of both general and partial equilibrium under imperfect insurance in this paper the assumption of i i d income innovations used in previous empirical studies is removed and the focus of the analysis is placed on models for the conditional variance of income shocks which is related to the measure of risk emphasized by the theory we first discriminate amongst various models of earnings determination that separate income shocks into idiosyncratic transitory and permanent components we allow for education and time specific differences in the stochastic process for earnings and for measurement error the conditional variance of the income shocks is modelled as a parsimonious arch process with both observable and unobserved heterogeneity the empirical analysis is conducted on data drawn from the 1967 1992 panel study of income dynamics we find strong evidence of sizeable arch effects as well as evidence of unobserved heterogeneity in the variances

precautionary saving in the small and in the large the theory of precautionary saving is shown to be isomorphic to the arrow pratt theory of risk aversion making possible the application of a large body of knowledge about risk aversion to precautionary saving and more generally to the theory of optimal choice under risk in particular a measure of the strength of the precautionary saving motive analogous to the arrow pratt measure of risk aversion is used to establish a number of new propositions about precautionary saving and to give a new interpretation of the dreze modigliani substitution effect copyright 1990 by the econometric society

changes in risk and the demand for saving abstract how does risk affect saving empirical work typically examines the effects of detectible differences in risk within the data how these differences affect saving in theoretical models depends on the metric one uses for risk for labor income risk second degree increases in risk require prudence to induce increased saving demand however prudence is not necessary for first degree risk increases and not sufficient for higher degree risk increases for increases in interest rate risk a precautionary effect and a substitution effect need to be compared this paper provides necessary and sufficient conditions on preferences for an n th degree change in risk to increase saving

tourism demand and economic growth in spain new insights based on the yield curve abstract this study examines for the first time the dynamic relationship between tourism growth and expected macroeconomic conditions of the destination country using a dcc garch model the focus is on the spanish economy in which monthly tourist arrivals data from 1998 to 2017 were collected for five key origin countries and around the world to capture expected macroeconomic conditions the spanish term structure of interest rates is used the results suggest that the tourism expected economic growth relationship is time varying without any country specific differences in the behaviour of the correlations importantly positive correlations reportedly coincides with a regime shift in the spanish economy whereas negative correlations are evident when expected economic conditions are stable it is also shown that the aforementioned relationship is influenced by key geopolitical and economic events the 9 11 terrorist attacks global financial crisis and the ecb s quantitative easing programme finally policy implications derived from the main findings are discussed