The link between money supply and tourism demand cycles: A case study of two Caribbean destinations

Keywords

tourism demand, money supply, cycles, nonlinearity, Aruba, Barbados

Abstract

This study investigates whether money supply cycles in Canada, United Kingdom, and United States affect tourism demand cycles for Aruba and Barbados. Money supply data are, generally, more easily available than business cycle data (gross domestic product) and have the potential to influence tourism demand cycles. The study contributes to the literature by presenting an economically detailed and sophisticated approach for further understanding the dynamics of tourism demand, using money supply cycles as the explanatory factor. In addition, the study advances the theory through new propositions. The methodology involves data decomposition together with unit root, cointegration, and causality testing. The results show that money supply cycles can impact the cyclical movements of tourism demand and that the impacts are asymmetric, depending on the stage of development of the cycles. These findings implicate the need for adequate policies to counter expected tourism performances below their trend.

Publication Date

1-1-2015

Original Citation

Ridderstaat, J., & Croes, R. (2015). The link between money supply and tourism demand cycles: A case study of two Caribbean destinations. Journal of Travel Research, DOI: 10.1177/0047287515619695.

Document Type

Paper

Language

English

Source Title

Journal of Travel Research

College

Rosen College of Hospitality Management

Location

Rosen College of Hospitality Management

This document is currently not available for download.

View via DOI


Share

COinS