This article provides new global evidence for the causal relationship between international tourist arrivals (TA) and economic growth (EG). The analysis considers 23 developing and developed countries and covers the period from January 1981 to December 2017. The causal relationship between TA and EG is determined using a bootstrap mixed-frequency Granger causality approach adopting a rolling window technique to evaluate its stability and persistency over time. Empirical results show that causality is time-varying in both the short-term and the long-term. We illustrate our results by constructing a new global connectivity index (GCI). The GCI shows that international TA remain a leading indicator for future EG in a global perspective, especially during the global financial crisis (GFC). Our findings suggest that tourism sector plays an important part in the future EG in developing countries after the GFC. Similarly, the period after the GFC is characterised by one of the highest values of the tourism-led EG in developed countries according to the GCI; however, this effect is temporal and quickly eradicates. Overall, we find that tourism sector in developing countries remains a primary contributor to future EG, which is not the case in developed countries.
In this paper, we provide a comprehensive study of the linkages between global commodity price shocks and national financial markets. We consider an overall price index, three proxies of global oil shocks (overall, supply and demand) and non-oil (metal) price shocks and assess their causal relationships with the stock prices of a large set of heterogeneous countries in terms of development. Using a mixed-frequency VAR approach in a time-varying setting, we construct a Global Commodity Connectivity Index and a Global Stock Connectivity Index to monitor the prevalence, over time, of Granger-Causality from commodities to stock markets and vice versa. Our results show the existence of time-varying causality during the observed period depending on the level of country development and the position on the global commodity shocks super-cycles: the commodities depression of the 1980s and 1990s, the commodity boom of the 2000s and the post-Global Financial Crisis.
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