of the Exchange Rate on Canadian Tourism

Size: px
Start display at page:

Download "of the Exchange Rate on Canadian Tourism"

Transcription

1 An Empirical Analysis of the Effects of the Exchange Rate on Canadian Tourism D. CHADEEAND Z. MIECZKOWSKI The effects of depreciation of the Canadian dollar on the Canadian tourist industry are estimated, and it is shown that the exchange rate had a modest impact in attracting U. S. visitors to Canada. However, the favorable exchange rate effects seem to be offset by other factors. The Canadian tourism industry has undergone unprecedented growth since the end of World War II. At present, tourism is among Canada s largest industries and generates about $20 billion in income annually. The tourism industry also employs about 600,000 people directly and many thousands more indirectly. Therefore, the importance of this industry to the Canadian economy should not be underestimated. It is in this spirit that, in October 1985, the &dquo;tourism Tomorrow&dquo; conference was organized in Ottawa. The major theme at this conference related to ways and means of improving Canada s balance of payments on international tourism. The latest figure shows that in 1984 the deficit on tourism accounts amounted to $2.2 billion. A number of factors were also identified by conference participants as being potentially responsible for the poor performance of the industry. Among these factors, the exchange rate seemed to have been the most controversial one, the reason being that while it is generally agreed that the weakening of the Canadian dollar over the last decade must have been a positive boost to the tourism industry, there is some uncertainty about the magnitude of the exchange rate effects because no study to date has been undertaken to empirically estimate such effects. For instance, between 1976 and 1985, the Canadian-U.S. exchange rate has depreciated by roughly 35%, from a low of 0.98 to a high of During the same period, Canadian export earnings from U.S. tourists and the number of U. S. visitors coming to Canada have increased at a lesser rate (see Figures 1 and 2). In this connection, an important question arises as to the impact of the depreciation of the Canadian dollar relative to the U.S. dollar on the Canadian tourism industry. The above considerations represent the underlying motivation of the present study. The objectives of this article are to briefly review past studies and to estimate empirically the impact of the depreciation of the Canadian dollar on the tourism industry. Specifically, the hypothesis that the depreciation of the dollar has resulted in an increase of tourist earnings will be tested. D. Chadee is a Research Assistant, Department otagricultural Economics and Farm Management, and Z. Mieczkowski is an Associate Professor In the Department of Geography, University of Manitoba, Canada. THEORETICAL FRAMEWORK For the most part, empirical studies on international tourism have investigated the demand for tourism services in the U.S. Although some of these studies have directly or indirectly referred to the exchange rates, only recently has this variable been given proper attention. A first attempt to measure the effects of exchange rate fluctuations on receipts from tourism was made by Gerakis (1965). He conducted a comparative study of seven countries between 1954 and Four of these countries, one of which was Canada, devalued their currency, while the three others revalued their currency during that period. His results show that Canada experienced a relatively modest increase in earnings from tourism following her currency devaluation. Some of the more substantive research on the subject of exchange rate and its effects on the tourism sector has been carried out by Gray (1966, 1970, 1982). He is the first to estimate the income and exchange rate elasticities of the demand for imports on international tourism accounts of the U.S. and Canada. The period studied was His general conclusions were that the depreciation of the Canadian dollar had a positive impact on the tourism sector in the sense that the balance on current account improved following the depreciation. Keintz (1968), Crampon and Tan (1973), Stronge and Redman (1983), and Loeb (1982) used a general model for the international demand for tourism services. Of these studies, only Loeb examined the effects of the exchange rate, among other variables, on the exports of tourism services from the U.S. as well as on the levels of U.S. receipts from foreign tourism. The model used by Loeb was of the following general form: where: Y YJ, z BoRYPCBI EXB2 RPIB3 e- is a measure of exports of travel services from country z to country j. RYPC is a measure of income EX is the currency exchange rate RPI e is the relative price index between country J and Z is the error term. 13

2 FIGURE 1 FIGURE 2 14

3 Different variations of the above equation were estimated in the log form. First, dummy variables were included to represent special events. A second formulation was to express the dependent variable in per capita form. Data for the period for seven countries were used. The results indicate that the exchange rate variable was statistitally significant for only two countries. For Canada, the exchange rate variable was not statistically different from zero, implying that the exchange rate had no effect on the export of tourism services for Canada. Before proceeding any further, two points must be considered with respect to the above model. First, the inclusion of both the exchange rate variable and relative prices as explanatory variables in the above model may lead to serious statistical problems because the exchange rate is actually a measure of relative prices. This is particularly true in the case of Canada and the U.S., where there is perfect arbitrage between the two countries. Such specification might lead to multicollinearity, a problem which is not addressed by the author. The second point relates to seasonality. Seasonal patterns in tourist flows and expenditures are well known characteristics of tourism (see Figures 1 and 2). Gray is the only one who attempted to deal with this problem by assigning differential weights for the third quarter in computing the annual mean exchange rate. Failure to include seasonality in previous travel models suggest that previous results should be interpreted with caution. Hence, it becomes clear that previous attempts to model the tourism industry have left out an important variable that explains seasonality. In this article, dummy variables are used to account for seasonality in modeling the tourism sector. The impacts of fluctuations in the exchange rate on the tourism sector can also be analyzed within the framework of the theory of international trade. The most commonly used methodology is the two-country, one-commodity partial equilibrium model. This model seems particularly relevant for the problem at hand. Canada is assumed to be the exporter of tourism services and the U.S. is considered to be the importer of these services from Canada. With no restriction of any kind between the two countries and assuming the exchange rate is at parity, equilibrium is achieved at price P1 and quantity Q1. This equilibrium is shown in Figure 3. At equilibrium, (E), the number of U.S. visitors coming to Canada is OQ, at a price level OP1. The gross revenue of the industry is OP1EQI A depreciation of the Canadian dollar vis-a-vis the U.S. dollar will result in more attractive desti- Canada becoming an economically nation for U.S. tourists, ceteris paribus, because a depreciation of the Canadian dollar translates into an increase in the purchasing power of the U.S. dollar. The immediate (shortrun) effect will be a shift of the U.S. import demand function (EDus) for Canadian travel services to the new position EDlus- It should also be noted that in the short run the excess supply curve (EScan) does not change. The result is a new equilibrium, (E1). A currency depreciation clearly results in an increase in the number of U.S. visitors to Canada from OQ j to OQ3 at the initial price. This is the maximum impact. However, as the demand for Canadian tourism services increases in the short run, pressure on the market drives prices upwards. The equilibrium price increases from OPI to OP2 on the assumption that the export supply of tourism services is not perfectly elastic. Higher prices for tourism services in Canada will curb the U.S. demand for such services. The net increases in the number of U.S. visitors coming to Canada is reduced by Q3Q2. The gross revenue of the industry following the depreciation is now OP2EIQ2. The magnitude of the P1 I Q 1 FIGURE 3 EFFECTS OF CURRENCY DEPRECIATION ON EXPORTS is initial price is initial quantity ES is excess supply schedule for Canada ED is excess demand schedule for U.S. changes in the total revenue following the depreciation depends on the elasticity of the excess functions, that is, the slope of both the excess supply and the excess demand functions. Elastic excess supply and demand functions (ES~an) will result in a net increase in total revenue following a currency depreciation. In summary, on the assumption that both excess functions are elastic, a currency depreciation will likely result in a larger number of U.S. visitors coming to Canada and an increased revenue for the Canadian tourist sector. The next section develops econometric models that estimate the responsiveness of U.S. visitors and their expenditures to a depreciation of the Canadian dollar relative to the U.S. dollar. THE ECONOMETRIC MODEL Classical economic theory postulates that the major determinants of the demand for tourism are the prices of tourist products, the prices of substitutes, the income of tourists, and any other exogeneous factors that might affect the taste of travelers. The exchange rate can be considered as one such factor. Additionally, dummy variables are included in the model to account for seasonality. Mathematically, the U.S. demand for Canadian travel services can be expressed as: 1It was pointed out by an anonymous reviewer that the foregoing analysis is based on the assumption of full capacity and that the industry under consideration never operates under full capacity. In off seasons for instance, pricees are often reduced to increase occupancy rates in hotels, etc. This is quite right and as the reviewer pointed out there might even be seasonal closures. In such an instance the industry will be operating on a different excess supply curve and this is accommodated in the empirical analysis by the inclusion of seasonal dummy variables. 15

4 (1) EDus, can f(ctpi, USTPI, USYD, EX, USPOP, Di) where EDus,canis a measure of the U. S. demand for, Canadian travel services, represented here by the number of U. S. visitors to Canada on a quarterly basis. CTPI is the Canadian travel price index, USTPI is the U.S. travel price index, used here as a proxy for the prices of substitutes, ( ) USYD is the total real disposable income in the U.S. EX is the Canadian-U.S. real exchange rate expressed as the number of Canadian dollars that can be exchanged for one U.S. dollar. 2 USPOPis the size of the U.S. population. Di is a set of seasonal dummy variables where: D2 1 for the 2nd quarter 0 otherwise D3 1 for the 3rd quarter 0 otherwise D4 1 for the last quarter 0 otherwise. All variables are expressed on a quarterly basis. It is expected that the variables USTPI, USYD and USPOP are directly related to the dependent variable EDus can (i.e., a EDus can/ d USTPI > 0; a EDu,,can/ a USYD > 0 and a EDus,can/ a USPOP > 0). Conversely, the variable CTPI is expected to be inversely related to the dependent variable i.e. d EDus can/ a CTPI < 0. However, the exchange rate variable is expected to be directly related to the dependent variable EDus,can i. e. d EDus,can/ a EX > 0. Conceptually, the higher the disposable income, the higher will be the demand for foreign tourist services, ceteris paribus. This hypothesis rests on the assumption that the goods in question are normal goods. If the good in question is an inferior good, however, then an increase in disposable income will result in a decrease in the demand for it; i.e., d EDus can/ a USYD > 0 is not excluded. The effects of fluctuations in the Canadian-U. S. exchange rate on receipts from U. S. tourism can be estimated using the following model: (2) USX f (CTPI, EX, USYD, Di) where USX: is the total real expenditure per U.S. visitor in Canada, expressed in Canadian dollars. CTPI, EX, USYD and Di are as described in equation ( 1 ). The hypothesized relationship is that a depreciation of the exchange rate will result in an increase in receipts from U.S. tourists, i.e. a USX/ a EX > 0. A direct relationship is also expected between the dependent variable and the variables To estimate the impacts of fluctuations of the exchange rate on the Canadian tourism industry, the coefficients associated with the exchange rate variable (EX) in equations ( 1 ) and (2) have to be estimated. Alternatively, both questions (1) and (2) can be expressed in the following form: Both equations (3) and (4) can be estimated using ordinary least squares regression methods after taking the natural log (Ln) of each equation. The resulting models to be estimated, including the seasonal dummy variables in non-log form, are shown by equations (5) and (6). Equations (5) and (6) have the added advantage that the estimated coefficient (except for the dummy variables) can be interpreted as the elasticities of the dependent variable with respect to each for the explanatory variables. EMPIRICAL RESULTS The above models were estimated using ordinary least squares (OLS) regression methods. Quarterly data for the period 1976( 1 )-1985(4) were used. Measures of the dependent variables, visits made by U.S. residents to Canada, and expenditures per U.S. visitor in Canada were obtained from Statistics Canada s publication, Travel Between Canada and Other Countries. Data on the exchange rate were taken from various issues of the Bank of Canada Review, Bank of Canada. Quarterly noon spot rates for the Canadian-U.S. exchange rates were used. Estimates of U.S. population and income were obtained from the Survey on Current Business, published by the U. S. Department of Commerce. Data on the travel price indices for Canada were obtained from Statistics Canada, while the U.S. travel price indices were obtained from the U.S. Travel Data Center. The travel price index (TPI) is a composite index consisting of the cost of food away from home, lodging, transportation, and other goods and services purchased while away from home. The transportation component of this index includes air fares, inter-city train and bus fares, and the cost of gasoline. The ordinary least squares estimates of the regression equation (5) and (6) are summarized in Table 1. The results in Table 1 indicate that all variables had the expected signs based on a priori economic reasoning. One interesting finding relates to the inverse relationship that exists between the income variable and the dependent variable in equation 5. What this means is that as the level of disposable income in the U.S. increases, less U.S. visitors come to Canada. To some extent this strengthens the view that Canada is considered a quasi-domestic destination among Americans. When the level of disposable income increases, the U.S. travelers prefer other international destinations to Canada, particularly Western Europe, Mexico, and the Caribbean. 16

5 TAB LE 1 OLS REGRESSION RESULTS OF THE DEMAND FOR CANADIAN TRAVEL SERVICES BY THE U.S. AND THE DETERMINANTS OF U.S. TOURIST EXPENDITURE IN CANADA~a1 a Both equations are m logarithmic form with N 36. b R-Square 0.95, D.W. 1.5; F 98.2 C R-Square 0.93; D.W. 2.2; F d Significant at the.90 level. Note: The variable USTPI was dropped from the model because of the problem of multicollinearity. The decision for dropping this specific vanable was based on the choice of the variable with the highest correlation coefficient with the variable CTPI. The exchange rate variable had the expected sign and was also statistically different from zero. The exchange rate elasticity for the demand for Canadian tourism services was estimated to be This number implies that for every percent depreciation of the Canadian-U.S. exchange rate, there is a corresponding 1.26% increase in the number of U.S. visitors coming to Canada. This estimate and the fact that the exchange rate depreciated by about 35% between lead to the inferrence that the number of U.S. visitors entering Canada increased by about 44% as a direct result of the currency depreciation. The coefficients of the seasonal dummy variables were significantly different from zero, thereby confirming the importance of seasonality in tourism. Also conforming to a priori expectation are the signs associated with the variable explaining U.S. population (USPOP) and the variable of the Canadian Travel Price Index (CTPI). The results for the determinants of Canadian real tourism receipts (from U.S. visitors) are also summarized in Table 1. All variables had the expected signs. The seasonal dummy variables were again highly statistically significant. The exchange rate variable, although having the expected sign, was only statistically different from zero at the.80 confidence level. The exchange rate elasticity of U.S. visitor s expenditure in Canada was estimated to be To some extent the elasticity figure implies that U.S. visitors expenditures in Canada are not very responsive to exchange-rate fluctuations. This finding is consistent with Loeb s (1982) results, where Canadian expenditure in the U.S. were found to be unresponsive to the exchange rate. Certainly this does not mean that receipts from U. S. tourists did not increase between 1976 and To the extent that an exchange rate elasticity of 0.52 was estimated, it implies that, between 1976 and 1984, receipts from U.S. visitors increased by only about 18% following the 35% currency depreciation. This increase indicates the relative importance of the exchange rate variable to Canadian real tourism receipts as well as on the flow of U.S. visitors to Canada. The findings of this study are interesting in that they challenge the conventional wisdom that the depreciation of the Canadian dollar vis-a-vis the U.S. dollar has resulted in substantial benefits to the Canadian tourist industry. The results clearly show that such benefits were modest. A number of factors can be cited to explain why U.S. visitors have not been more responsive to the weak Canadian dollar. One factor is that at the same time as the Canadian dollar depreciated relative to the U.S. dollar, the currencies of major Western European countries and Mexico depreciated even faster relative to the U. S. dollar. These countries also happen to be very popular destinations for U.S. visitors. Another factor is attributed to the relative prices between the two countries. American visitors generally perceive Canada as an expensive country. Especially the prices of gasoline, alcohol, and tobacco are generally higher in C anada compared to U. S. Hence, the above factors have directly or indirectly offset the advantages of a weaker dollar. While it is obvious that many factors are beyond the responsibility of policymakers of the tourism industry, efforts still can be made on the marketing front to reap as many benefits as possible from a weaker dollar. SUMMARY During the last decade, the Canadian-U.S. exchange rate has depreciated by about 35 %. At the same time, the tourism industry in Canada experienced rather slow growth. Hence one major question arises as to how beneficial were fluctuations in the exchange rate to the Canadian tourism industry. The objective of this article was to estimate the effects of the depreciation of the Canadian dollar on the Canadian tourist industry. Drawing on earlier literature, a theoretical framework was developed to meet the above objective. Empirical analyses determined that the exchange rate had a modest impact in attracting U.S. visitors to Canada. Consequently the impact of exchange rate on Canadian receipts from U.S. visitors was found to be small. These findings are interesting since many questions are left unanswered. Although the depreciation of the exchange rate did have positive impacts on the tourism industry, the overall performance of the industry seem to indicate that such effects have been offset by other factors. It should therefore be interesting for future research to identify these factors. Future modeling and empirical efforts should take these factors into account to arrive at more conclusive results. REFERENCES Crampon, L. J., and K. T. Tan (1973), "A Model of Tourism Flow into the Pacific," Revue de Tourisme 3, Gerakis, Andreas S. (1965), "Effects of Exchange-Rate Devaluations and Revaluations on Receipts from Tourism," IMF Staff Papers. Washington International Monetary Fund, Vol. 1, XII, #1, March, Gray, H. P. ( 1966), "The Demand for International Travel by the United States and Canada," International Economic Review 7 (1), Gray, H. Peter (1970), International Travel-International Trade, Lexington: Heath Lexington Books. Gray, H. Peter (1982), "The Contributions of Economics to Tourism," Annals of Tourism Research 9, Keintz, Rita M. (1968), "A Study of the Demand for International Travel to and from the United States," Proceedings, 10th Conference WCTR, Loeb, D. P. (1982), "International Travel to the United States: An Economic Evaluation," Annals of Tourism Research 9 (1), Stronge, William B. and Milton Redman (1982), "U.S. Tourism in Mexico: An Empirical Analysis," Annals of Tourism Research 9,

INFLATION, INTEREST RATE, AND EXCHANGE RATE: WHAT IS THE RELATIONSHIP?

INFLATION, INTEREST RATE, AND EXCHANGE RATE: WHAT IS THE RELATIONSHIP? 107 INFLATION, INTEREST RATE, AND EXCHANGE RATE: WHAT IS THE RELATIONSHIP? Maurice K. Shalishali, Columbus State University Johnny C. Ho, Columbus State University ABSTRACT A test of IFE (International

More information

Causes of Inflation in the Iranian Economy

Causes of Inflation in the Iranian Economy Causes of Inflation in the Iranian Economy Hamed Armesh* and Abas Alavi Rad** It is clear that in the nearly last four decades inflation is one of the important problems of Iranian economy. In this study,

More information

Factors affecting the inbound tourism sector. - the impact and implications of the Australian dollar

Factors affecting the inbound tourism sector. - the impact and implications of the Australian dollar Factors affecting the inbound tourism sector - the impact and implications of the Australian dollar 1 Factors affecting the inbound tourism sector - the impact and implications of the Australian dollar

More information

Module 5: Multiple Regression Analysis

Module 5: Multiple Regression Analysis Using Statistical Data Using to Make Statistical Decisions: Data Multiple to Make Regression Decisions Analysis Page 1 Module 5: Multiple Regression Analysis Tom Ilvento, University of Delaware, College

More information

TOURISM TRENDS ISSUES AND CHALLENGES - (IMPLICATIONS FOR CARIBBEAN ECONOMIES) Winfield Griffith, Caribbean Tourism Organization, April, 2009

TOURISM TRENDS ISSUES AND CHALLENGES - (IMPLICATIONS FOR CARIBBEAN ECONOMIES) Winfield Griffith, Caribbean Tourism Organization, April, 2009 TOURISM TRENDS ISSUES AND CHALLENGES - (IMPLICATIONS FOR CARIBBEAN ECONOMIES) Winfield Griffith, Caribbean Tourism Organization, April, 2009 IMPORTANCE OF TOURISM Most tourism dependent region in the world

More information

FISCAL POLICY* Chapter. Key Concepts

FISCAL POLICY* Chapter. Key Concepts Chapter 11 FISCAL POLICY* Key Concepts The Federal Budget The federal budget is an annual statement of the government s expenditures and tax revenues. Using the federal budget to achieve macroeconomic

More information

Chapter 1. Introduction

Chapter 1. Introduction Chapter 1 Introduction What is productivity, how is it measured and why is it important? These questions are a useful starting point from which we can define and explain the range of productivity measures

More information

Renminbi Depreciation and the Hong Kong Economy

Renminbi Depreciation and the Hong Kong Economy Thomas Shik Acting Chief Economist thomasshik@hangseng.com Renminbi Depreciation and the Hong Kong Economy If the recent weakness of the renminbi persists, it is likely to have a positive direct impact

More information

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Chatper 34 International Finance - Test Bank MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The currency used to buy imported goods is A) the

More information

DOES GOVERNMENT R & D POLICY MAINLY BENEFIT SCIENTISTS AND ENGINEERS?

DOES GOVERNMENT R & D POLICY MAINLY BENEFIT SCIENTISTS AND ENGINEERS? DOES GOVERNMENT R & D POLICY MAINLY BENEFIT SCIENTISTS AND ENGINEERS? Austan Goolsbee University of Chicago, GSB, American Bar Foundation, and National Bureau of Economic Research Presented at the A.E.A.

More information

INFLATION AND INTERNATIONAL TRADE

INFLATION AND INTERNATIONAL TRADE INFLATION AND INTERNATIONAL TRADE James P. Houck Professor, Department of Agricultural and Applied Economics, University of Minnesota International trade and trade policy are difficult enough to understand

More information

Do declining exchange rates help the U.S. economy?

Do declining exchange rates help the U.S. economy? Do declining exchange rates help the U.S. economy? John J. Heim Rensselaer Polytechnic Institute ABSTRACT Falling exchange rates cause a decline in the value of the U. S. dollar, increasing import prices

More information

Sample Question Paper (Set-2) Economics (030) Class XII (2015-16) Section A: Microeconomics

Sample Question Paper (Set-2) Economics (030) Class XII (2015-16) Section A: Microeconomics Sample Question Paper (Set-2) Economics (030) Class XII (2015-16) Time : 3 Hours Maximum Marks : 100 Instructions: 1. All questions in both sections are compulsory. However, there is internal choice in

More information

As we explained in the textbook discussion of statistical estimation of demand

As we explained in the textbook discussion of statistical estimation of demand Estimating and Forecasting Industry Demand for Price-Taking Firms As we explained in the textbook discussion of statistical estimation of demand and statistical forecasting, estimating the parameters of

More information

What Determines Exchange Rates? In the Short Run In the Long Run

What Determines Exchange Rates? In the Short Run In the Long Run What Determines Exchange Rates? In the Short Run In the Long Run Selected Exchange Rates Selected Exchange Rates Determinants of the Exchange Rate in the Short Run In the short run, movements of currency

More information

Supply & Demand in the Lodging Industry: Philadelphia Hotel Industry

Supply & Demand in the Lodging Industry: Philadelphia Hotel Industry Supply & Demand in the Lodging Industry: A Simultaneous Equation Model of the Center City Philadelphia Hotel Industry Julie Runyan The College of New Jersey Dr. Vandegrift April 15, 2004 Introduction Tourism

More information

Chapter 11. International Economics II: International Finance

Chapter 11. International Economics II: International Finance Chapter 11 International Economics II: International Finance The other major branch of international economics is international monetary economics, also known as international finance. Issues in international

More information

CHAPTER 15 EXCHANGE-RATE ADJUSTMENTS AND THE BALANCE OF PAYMENTS

CHAPTER 15 EXCHANGE-RATE ADJUSTMENTS AND THE BALANCE OF PAYMENTS CHAPTER 15 EXCHANGE-RATE ADJUSTMENTS AND THE BALANCE OF PAYMENTS MULTIPLE-CHOICE QUESTIONS 1. According to the absorption approach, the economic circumstances that best warrant a currency devaluation is

More information

Expenditure Changing and Expenditure Switching policies. In an open economy setting, policymakers need to achieve two goals of

Expenditure Changing and Expenditure Switching policies. In an open economy setting, policymakers need to achieve two goals of World Economy Expenditure Changing 1 Expenditure Changing and Expenditure Switching policies In an open economy setting, policymakers need to achieve two goals of macroeconomic stability, viz. internal

More information

Is the Forward Exchange Rate a Useful Indicator of the Future Exchange Rate?

Is the Forward Exchange Rate a Useful Indicator of the Future Exchange Rate? Is the Forward Exchange Rate a Useful Indicator of the Future Exchange Rate? Emily Polito, Trinity College In the past two decades, there have been many empirical studies both in support of and opposing

More information

Beef Demand: What is Driving the Market?

Beef Demand: What is Driving the Market? Beef Demand: What is Driving the Market? Ronald W. Ward Food and Economics Department University of Florida Demand is a term we here everyday. We know it is important but at the same time hard to explain.

More information

Fluctuations in Exchange Rate and its Impact on Macroeconomic Performance of Pakistan Farzana Shaheen

Fluctuations in Exchange Rate and its Impact on Macroeconomic Performance of Pakistan Farzana Shaheen and its Impact on Macroeconomic Performance of Pakistan Abstract The present study was conducted to examine the extent and direction of exchange rate volatility and its impact on macroeconomic performance

More information

What you will learn: UNIT 3. Traditional Flow Model. Determinants of the Exchange Rate

What you will learn: UNIT 3. Traditional Flow Model. Determinants of the Exchange Rate What you will learn: UNIT 3 Determinants of the Exchange Rate (1) Theories of how inflation, economic growth and interest rates affect the exchange rate (2) How trade patterns affect the exchange rate

More information

Manual on Air Traffic Forecasting

Manual on Air Traffic Forecasting Doc 8991 AT/722/3 Manual on Air Traffic Forecasting Approved by the Secretary General and published under his authority Third Edition 2006 International Civil Aviation Organization AMENDMENTS The issue

More information

Chapter 9. Forecasting Exchange Rates. Lecture Outline. Why Firms Forecast Exchange Rates

Chapter 9. Forecasting Exchange Rates. Lecture Outline. Why Firms Forecast Exchange Rates Chapter 9 Forecasting Exchange Rates Lecture Outline Why Firms Forecast Exchange Rates Forecasting Techniques Technical Forecasting Fundamental Forecasting Market-Based Forecasting Mixed Forecasting Forecasting

More information

1) Explain why each of the following statements is true. Discuss the impact of monetary and fiscal policy in each of these special cases:

1) Explain why each of the following statements is true. Discuss the impact of monetary and fiscal policy in each of these special cases: 1) Explain why each of the following statements is true. Discuss the impact of monetary and fiscal policy in each of these special cases: a) If investment does not depend on the interest rate, the IS curve

More information

THREE KEY FACTS ABOUT ECONOMIC FLUCTUATIONS

THREE KEY FACTS ABOUT ECONOMIC FLUCTUATIONS 15 In this chapter, look for the answers to these questions: What are economic fluctuations? What are their characteristics? How does the model of demand and explain economic fluctuations? Why does the

More information

Impact of Mexico's Peso-Dollar Exchange Rate on Texas Metropolitan Area Retail Sales

Impact of Mexico's Peso-Dollar Exchange Rate on Texas Metropolitan Area Retail Sales Impact of Mexico's Peso-Dollar Exchange Rate on Texas Metropolitan Area Retail Sales M.A. Anari Research Economist Mark G. Dotzour Chief Economist Texas A&M University May 2001 2001, Real Estate Center.

More information

Micro and macroeconomic determinants of net interest margin in the Albanian banking system (2002-2014)

Micro and macroeconomic determinants of net interest margin in the Albanian banking system (2002-2014) Micro and macroeconomic determinants of net interest margin in the Albanian banking system (2002-2014) Eralda Leka, Monetary Policy Department, Meri Papavangjeli, Research Department, Bank of Albania*

More information

In this chapter we learn the potential causes of fluctuations in national income. We focus on demand shocks other than supply shocks.

In this chapter we learn the potential causes of fluctuations in national income. We focus on demand shocks other than supply shocks. Chapter 11: Applying IS-LM Model In this chapter we learn the potential causes of fluctuations in national income. We focus on demand shocks other than supply shocks. We also learn how the IS-LM model

More information

Examining the effects of exchange rates on Australian domestic tourism demand: A panel generalized least squares approach

Examining the effects of exchange rates on Australian domestic tourism demand: A panel generalized least squares approach 19th International Congress on Modelling and Simulation, Perth, Australia, 12 16 December 2011 http://mssanz.org.au/modsim2011 Examining the effects of exchange rates on Australian domestic tourism demand:

More information

Premaster Statistics Tutorial 4 Full solutions

Premaster Statistics Tutorial 4 Full solutions Premaster Statistics Tutorial 4 Full solutions Regression analysis Q1 (based on Doane & Seward, 4/E, 12.7) a. Interpret the slope of the fitted regression = 125,000 + 150. b. What is the prediction for

More information

Analyzing the Effect of Change in Money Supply on Stock Prices

Analyzing the Effect of Change in Money Supply on Stock Prices 72 Analyzing the Effect of Change in Money Supply on Stock Prices I. Introduction Billions of dollars worth of shares are traded in the stock market on a daily basis. Many people depend on the stock market

More information

PROVINCIAL OUTLOOK UPDATE February 6, 2015

PROVINCIAL OUTLOOK UPDATE February 6, 2015 PROVINCIAL OUTLOOK UPDATE February 6, 2015 Real GDP growth 2015 Annual % change CANADA B.C. 2.4 2.7 2.9 3.1 Several developments have occurred since the publication of our most recent Provincial Outlook

More information

Money and Public Finance

Money and Public Finance Money and Public Finance By Mr. Letlet August 1 In this anxious market environment, people lose their rationality with some even spreading false information to create trading opportunities. The tales about

More information

Managerial Economics

Managerial Economics Managerial Economics Unit 1: Demand Theory Rudolf Winter-Ebmer Johannes Kepler University Linz Winter Term 2012/13 Winter-Ebmer, Managerial Economics: Unit 1 - Demand Theory 1 / 54 OBJECTIVES Explain the

More information

ON THE DEATH OF THE PHILLIPS CURVE William A. Niskanen

ON THE DEATH OF THE PHILLIPS CURVE William A. Niskanen ON THE DEATH OF THE PHILLIPS CURVE William A. Niskanen There is no evidence of a Phillips curve showing a tradeoff between unemployment and inflation. The function for estimating the nonaccelerating inflation

More information

April 2015 Revenue Forecast. Methodology and Technical Documentation

April 2015 Revenue Forecast. Methodology and Technical Documentation STATE OF INDIANA STATE BUDGET AGENCY 212 State House Indianapolis, Indiana 46204-2796 317-232-5610 Michael R. Pence Governor Brian E. Bailey Director April 2015 Revenue Forecast Methodology and Technical

More information

Applied Econometrics and International Development Vol. 12-1 (2012)

Applied Econometrics and International Development Vol. 12-1 (2012) MERCHANDISE EXPORT DEMAND FUNCTION FOR EGYPT: A PANEL DATA ANALYSIS IBRAHIM, Mohamed Abbas 1 Abstract This study empirically estimates the critical parameters of merchandise export demand function for

More information

SHORT-RUN FLUCTUATIONS. David Romer. University of California, Berkeley. First version: August 1999 This revision: January 2012

SHORT-RUN FLUCTUATIONS. David Romer. University of California, Berkeley. First version: August 1999 This revision: January 2012 SHORT-RUN FLUCTUATIONS David Romer University of California, Berkeley First version: August 1999 This revision: January 2012 Copyright 2012 by David Romer CONTENTS Preface vi I The IS-MP Model 1 I-1 Monetary

More information

Introduction to microeconomics

Introduction to microeconomics RELEVANT TO ACCA QUALIFICATION PAPER F1 / FOUNDATIONS IN ACCOUNTANCY PAPER FAB Introduction to microeconomics The new Paper F1/FAB, Accountant in Business carried over many subjects from its Paper F1 predecessor,

More information

Monetary Policy Bank of Canada

Monetary Policy Bank of Canada Bank of Canada The objective of monetary policy may be gleaned from to preamble to the Bank of Canada Act of 1935 which says, regulate credit and currency in the best interests of the economic life of

More information

Agenda. Exchange Rates, Business Cycles, and Macroeconomic Policy in the Open Economy, Part 1. Exchange Rates. Exchange Rates.

Agenda. Exchange Rates, Business Cycles, and Macroeconomic Policy in the Open Economy, Part 1. Exchange Rates. Exchange Rates. Agenda, Business Cycles, and Macroeconomic Policy in the Open Economy, Part 1 How Are Determined A Supply-and-Demand Analysis 19-1 19-2 Nominal exchange rates: The nominal exchange rate indicates how much

More information

The US-China Trade Imbalance: Will Revaluing the RMB Help (Much)? Nicolaas Groenewold* and. Lei He

The US-China Trade Imbalance: Will Revaluing the RMB Help (Much)? Nicolaas Groenewold* and. Lei He The US-China Trade Imbalance: Will Revaluing the RMB Help (Much)? by Nicolaas Groenewold* and Lei He Economics Program, University of Western Australia, Crawley, WA 6009 Australia Abstract: The large US-China

More information

FORECASTING DEPOSIT GROWTH: Forecasting BIF and SAIF Assessable and Insured Deposits

FORECASTING DEPOSIT GROWTH: Forecasting BIF and SAIF Assessable and Insured Deposits Technical Paper Series Congressional Budget Office Washington, DC FORECASTING DEPOSIT GROWTH: Forecasting BIF and SAIF Assessable and Insured Deposits Albert D. Metz Microeconomic and Financial Studies

More information

Learning Objectives. Essential Concepts

Learning Objectives. Essential Concepts Learning Objectives After reading Chapter 7 and working the problems for Chapter 7 in the textbook and in this Workbook, you should be able to: Specify an empirical demand function both linear and nonlinear

More information

Long run v.s. short run. Introduction. Aggregate Demand and Aggregate Supply. In this chapter, look for the answers to these questions:

Long run v.s. short run. Introduction. Aggregate Demand and Aggregate Supply. In this chapter, look for the answers to these questions: 33 Aggregate Demand and Aggregate Supply R I N C I L E S O F ECONOMICS FOURTH EDITION N. GREGOR MANKIW Long run v.s. short run Long run growth: what determines long-run output (and the related employment

More information

Elasticity. I. What is Elasticity?

Elasticity. I. What is Elasticity? Elasticity I. What is Elasticity? The purpose of this section is to develop some general rules about elasticity, which may them be applied to the four different specific types of elasticity discussed in

More information

CHAPTER 14 BALANCE-OF-PAYMENTS ADJUSTMENTS UNDER FIXED EXCHANGE RATES

CHAPTER 14 BALANCE-OF-PAYMENTS ADJUSTMENTS UNDER FIXED EXCHANGE RATES CHAPTER 14 BALANCE-OF-PAYMENTS ADJUSTMENTS UNDER FIXED EXCHANGE RATES MULTIPLE-CHOICE QUESTIONS 1. Which of the following does not represent an automatic adjustment in balance-of-payments disequilibrium?

More information

Purchasing-Power Parity: Definition, Measurement, and Interpretation

Purchasing-Power Parity: Definition, Measurement, and Interpretation Purchasing-Power Parity: Definition, Measurement, and Interpretation Robert Lafrance and Lawrence Schembri, International Department The concept of purchasing-power parity (PPP) has two applications: it

More information

Theories of Exchange rate determination

Theories of Exchange rate determination Theories of Exchange rate determination INTRODUCTION By definition, the Foreign Exchange Market is a market 1 in which different currencies can be exchanged at a specific rate called the foreign exchange

More information

2013 Cape Breton Celtic Classic Sydney, Nova Scotia

2013 Cape Breton Celtic Classic Sydney, Nova Scotia 2013 Cape Breton Celtic Classic Sydney, Nova Scotia Economic Impact Assessment December 2013 The following analysis details the economic impact of the PGA Tour of Canada 2013 Cape Breton Celtic Classic

More information

Chapter 3 Quantitative Demand Analysis

Chapter 3 Quantitative Demand Analysis Managerial Economics & Business Strategy Chapter 3 uantitative Demand Analysis McGraw-Hill/Irwin Copyright 2010 by the McGraw-Hill Companies, Inc. All rights reserved. Overview I. The Elasticity Concept

More information

The labour market, I: real wages, productivity and unemployment 7.1 INTRODUCTION

The labour market, I: real wages, productivity and unemployment 7.1 INTRODUCTION 7 The labour market, I: real wages, productivity and unemployment 7.1 INTRODUCTION Since the 1970s one of the major issues in macroeconomics has been the extent to which low output and high unemployment

More information

INTRODUCTION AGGREGATE DEMAND MACRO EQUILIBRIUM MACRO EQUILIBRIUM THE DESIRED ADJUSTMENT THE DESIRED ADJUSTMENT

INTRODUCTION AGGREGATE DEMAND MACRO EQUILIBRIUM MACRO EQUILIBRIUM THE DESIRED ADJUSTMENT THE DESIRED ADJUSTMENT Chapter 9 AGGREGATE DEMAND INTRODUCTION The Great Depression was a springboard for the Keynesian approach to economic policy. Keynes asked: What are the components of aggregate demand? What determines

More information

Chapter 16 THE FOREIGN EXCHANGE MARKET AND TRADE ELASTICITIES

Chapter 16 THE FOREIGN EXCHANGE MARKET AND TRADE ELASTICITIES Chapter 16 THE FOREIGN EXCHANGE MARKET AND TRADE ELASTICITIES The model presented in Chapter 16 considers trade in goods and money. Money can be thought of as a particular type of asset that earns no nominal

More information

ENGINEERING LABOUR MARKET

ENGINEERING LABOUR MARKET ENGINEERING LABOUR MARKET in Canada Projections to 2025 JUNE 2015 ENGINEERING LABOUR MARKET in Canada Projections to 2025 Prepared by: MESSAGE FROM THE CHIEF EXECUTIVE OFFICER Dear colleagues: Engineers

More information

A Primer on Forecasting Business Performance

A Primer on Forecasting Business Performance A Primer on Forecasting Business Performance There are two common approaches to forecasting: qualitative and quantitative. Qualitative forecasting methods are important when historical data is not available.

More information

Determinants of the Hungarian forint/ US dollar exchange rate

Determinants of the Hungarian forint/ US dollar exchange rate Theoretical and Applied Economics FFet al Volume XXIII (2016), No. 1(606), Spring, pp. 163-170 Determinants of the Hungarian forint/ US dollar exchange rate Yu HSING Southeastern Louisiana University,

More information

Abstract. In this paper, we attempt to establish a relationship between oil prices and the supply of

Abstract. In this paper, we attempt to establish a relationship between oil prices and the supply of The Effect of Oil Prices on the Domestic Supply of Corn: An Econometric Analysis Daniel Blanchard, Saloni Sharma, Abbas Raza April 2015 Georgia Institute of Technology Abstract In this paper, we attempt

More information

a) Aggregate Demand (AD) and Aggregate Supply (AS) analysis

a) Aggregate Demand (AD) and Aggregate Supply (AS) analysis a) Aggregate Demand (AD) and Aggregate Supply (AS) analysis Determinants of AD: Aggregate demand is the total demand in the economy. It measures spending on goods and services by consumers, firms, the

More information

Econ 202 Final Exam. Table 3-1 Labor Hours Needed to Make 1 Pound of: Meat Potatoes Farmer 8 2 Rancher 4 5

Econ 202 Final Exam. Table 3-1 Labor Hours Needed to Make 1 Pound of: Meat Potatoes Farmer 8 2 Rancher 4 5 Econ 202 Final Exam 1. If inflation expectations rise, the short-run Phillips curve shifts a. right, so that at any inflation rate unemployment is higher. b. left, so that at any inflation rate unemployment

More information

Keynesian Macroeconomic Theory

Keynesian Macroeconomic Theory 2 Keynesian Macroeconomic Theory 2.1. The Keynesian Consumption Function 2.2. The Complete Keynesian Model 2.3. The Keynesian-Cross Model 2.4. The IS-LM Model 2.5. The Keynesian AD-AS Model 2.6. Conclusion

More information

CHAPTER 32 EXCHANGE RATES, BALANCE OF PAYMENTS, AND INTERNATIONAL DEBT

CHAPTER 32 EXCHANGE RATES, BALANCE OF PAYMENTS, AND INTERNATIONAL DEBT CHAPTER 32 EXCHANGE RATES, BALANCE OF PAYMENTS, AND INTERNATIONAL DEBT Chapter in a Nutshell Along with the flows of goods and services being traded between countries, there are corresponding flows of

More information

Evaluating Travelers Response to Social Media Using Facets-based ROI Metrics

Evaluating Travelers Response to Social Media Using Facets-based ROI Metrics University of Massachusetts - Amherst ScholarWorks@UMass Amherst Tourism Travel and Research Association: Advancing Tourism Research Globally Turning Insights Into Actions ~ the Crucial Role of Tourism

More information

Canonical Correlation Analysis

Canonical Correlation Analysis Canonical Correlation Analysis LEARNING OBJECTIVES Upon completing this chapter, you should be able to do the following: State the similarities and differences between multiple regression, factor analysis,

More information

The Life-Cycle Motive and Money Demand: Further Evidence. Abstract

The Life-Cycle Motive and Money Demand: Further Evidence. Abstract The Life-Cycle Motive and Money Demand: Further Evidence Jan Tin Commerce Department Abstract This study takes a closer look at the relationship between money demand and the life-cycle motive using panel

More information

ICC 103-7. 17 September 2009 Original: French. Study. International Coffee Council 103 rd Session 23 25 September 2009 London, England

ICC 103-7. 17 September 2009 Original: French. Study. International Coffee Council 103 rd Session 23 25 September 2009 London, England ICC 103-7 17 September 2009 Original: French Study E International Coffee Council 103 rd Session 23 25 September 2009 London, England Coffee price volatility Background In the context of its programme

More information

THE IMPACT OF EXCHANGE RATE VOLATILITY ON BRAZILIAN MANUFACTURED EXPORTS

THE IMPACT OF EXCHANGE RATE VOLATILITY ON BRAZILIAN MANUFACTURED EXPORTS THE IMPACT OF EXCHANGE RATE VOLATILITY ON BRAZILIAN MANUFACTURED EXPORTS ANTONIO AGUIRRE UFMG / Department of Economics CEPE (Centre for Research in International Economics) Rua Curitiba, 832 Belo Horizonte

More information

Econ 202 H01 Final Exam Spring 2005

Econ 202 H01 Final Exam Spring 2005 Econ202Final Spring 2005 1 Econ 202 H01 Final Exam Spring 2005 1. Which of the following tends to reduce the size of a shift in aggregate demand? a. the multiplier effect b. the crowding-out effect c.

More information

A New Effective Exchange Rate Index for the Canadian Dollar

A New Effective Exchange Rate Index for the Canadian Dollar A New Effective Exchange Rate Index for the Canadian Dollar Janone Ong, Financial Markets Department A new Canadian-dollar effective exchange rate index (CERI) has been created to replace the C 6 index

More information

Answers to Text Questions and Problems. Chapter 22. Answers to Review Questions

Answers to Text Questions and Problems. Chapter 22. Answers to Review Questions Answers to Text Questions and Problems Chapter 22 Answers to Review Questions 3. In general, producers of durable goods are affected most by recessions while producers of nondurables (like food) and services

More information

National Money as a Barrier to International Trade: The Real Case for Currency Union Andrew K. Rose and Eric van Wincoop*

National Money as a Barrier to International Trade: The Real Case for Currency Union Andrew K. Rose and Eric van Wincoop* National Money as a Barrier to International Trade: The Real Case for Currency Union Andrew K. Rose and Eric van Wincoop* Revised: December 18, 2000. Comments Welcome Andrew K. Rose Eric van Wincoop Haas

More information

Markups and Firm-Level Export Status: Appendix

Markups and Firm-Level Export Status: Appendix Markups and Firm-Level Export Status: Appendix De Loecker Jan - Warzynski Frederic Princeton University, NBER and CEPR - Aarhus School of Business Forthcoming American Economic Review Abstract This is

More information

Asian Economic and Financial Review DETERMINANTS OF THE AUD/USD EXCHANGE RATE AND POLICY IMPLICATIONS

Asian Economic and Financial Review DETERMINANTS OF THE AUD/USD EXCHANGE RATE AND POLICY IMPLICATIONS Asian Economic and Financial Review ISSN(e): 2222-6737/ISSN(p): 2305-2147 journal homepage: http://www.aessweb.com/journals/5002 DETERMINANTS OF THE AUD/USD EXCHANGE RATE AND POLICY IMPLICATIONS Yu Hsing

More information

Study Questions (with Answers) Lecture 14 Pegging the Exchange Rate

Study Questions (with Answers) Lecture 14 Pegging the Exchange Rate Study Questions (with Answers) Page 1 of 7 Study Questions (with Answers) Lecture 14 the Exchange Rate Part 1: Multiple Choice Select the best answer of those given. 1. Suppose the central bank of Mexico

More information

CHAPTER 16 EXCHANGE-RATE SYSTEMS

CHAPTER 16 EXCHANGE-RATE SYSTEMS CHAPTER 16 EXCHANGE-RATE SYSTEMS MULTIPLE-CHOICE QUESTIONS 1. The exchange-rate system that best characterizes the present international monetary arrangement used by industrialized countries is: a. Freely

More information

DOES A STRONG DOLLAR INCREASE DEMAND FOR BOTH DOMESTIC AND IMPORTED GOODS? John J. Heim, Rensselaer Polytechnic Institute, Troy, New York, USA

DOES A STRONG DOLLAR INCREASE DEMAND FOR BOTH DOMESTIC AND IMPORTED GOODS? John J. Heim, Rensselaer Polytechnic Institute, Troy, New York, USA DOES A STRONG DOLLAR INCREASE DEMAND FOR BOTH DOMESTIC AND IMPORTED GOODS? John J. Heim, Rensselaer Polytechnic Institute, Troy, New York, USA ABSTRACT Rising exchange rates strengthen the dollar and lower

More information

Do Commodity Price Spikes Cause Long-Term Inflation?

Do Commodity Price Spikes Cause Long-Term Inflation? No. 11-1 Do Commodity Price Spikes Cause Long-Term Inflation? Geoffrey M.B. Tootell Abstract: This public policy brief examines the relationship between trend inflation and commodity price increases and

More information

dr Bartłomiej Rokicki Chair of Macroeconomics and International Trade Theory Faculty of Economic Sciences, University of Warsaw

dr Bartłomiej Rokicki Chair of Macroeconomics and International Trade Theory Faculty of Economic Sciences, University of Warsaw Chair of Macroeconomics and International Trade Theory Faculty of Economic Sciences, University of Warsaw The small open economy The small open economy is an economy that is small enough compared to the

More information

Chapter 14 Foreign Exchange Markets and Exchange Rates

Chapter 14 Foreign Exchange Markets and Exchange Rates Chapter 14 Foreign Exchange Markets and Exchange Rates International transactions have one common element that distinguishes them from domestic transactions: one of the participants must deal in a foreign

More information

COMMITTEE ON COMMODITY PROBLEMS

COMMITTEE ON COMMODITY PROBLEMS December 2011 CCP:TE 12/2 E COMMITTEE ON COMMODITY PROBLEMS INTERGOVERNMENTAL GROUP ON TEA TWENTIETH SESSION Colombo, Sri Lanka, 30 January - 1 February 2012 A DEMAND ANALYSIS FOR THE TEA MARKET I. INTRODUCTION

More information

ARKET INSIGHTS UPDATE

ARKET INSIGHTS UPDATE SPOTLIGHT ON 2015 NORTH AMERICAN TRAVEL OUTLOOK A monthly update including relevant information on tourism industry trends, consumer market research, Hawai i s performance as a destination, and competitive

More information

Consumer Price Indices in the UK. Main Findings

Consumer Price Indices in the UK. Main Findings Consumer Price Indices in the UK Main Findings The report Consumer Price Indices in the UK, written by Mark Courtney, assesses the array of official inflation indices in terms of their suitability as an

More information

Learning Objectives. Chapter 17. Trading Currencies in Foreign Exchange Markets. Trading Currencies in Foreign Exchange Markets (cont.

Learning Objectives. Chapter 17. Trading Currencies in Foreign Exchange Markets. Trading Currencies in Foreign Exchange Markets (cont. Chapter 17 Financing World Trade Learning Objectives Explain how foreign exchange rates are determined. Differentiate between floating and fixed exchange rate systems. Contrast the balance of trade and

More information

The Effect on Housing Prices of Changes in Mortgage Rates and Taxes

The Effect on Housing Prices of Changes in Mortgage Rates and Taxes Preliminary. Comments welcome. The Effect on Housing Prices of Changes in Mortgage Rates and Taxes Lars E.O. Svensson SIFR The Institute for Financial Research, Swedish House of Finance, Stockholm School

More information

EC2105, Professor Laury EXAM 2, FORM A (3/13/02)

EC2105, Professor Laury EXAM 2, FORM A (3/13/02) EC2105, Professor Laury EXAM 2, FORM A (3/13/02) Print Your Name: ID Number: Multiple Choice (32 questions, 2.5 points each; 80 points total). Clearly indicate (by circling) the ONE BEST response to each

More information

The Open Economy. Nominal Exchange Rates. Chapter 10. Exchange Rates, Business Cycles, and Macroeconomic Policy in the Open Economy

The Open Economy. Nominal Exchange Rates. Chapter 10. Exchange Rates, Business Cycles, and Macroeconomic Policy in the Open Economy Chapter 10 Exchange Rates, Business Cycles, and Macroeconomic Policy in the Open Economy Economics 282 University of Alberta The Open Economy Two aspects of the interdependence of the world economies:

More information

Constructing a TpB Questionnaire: Conceptual and Methodological Considerations

Constructing a TpB Questionnaire: Conceptual and Methodological Considerations Constructing a TpB Questionnaire: Conceptual and Methodological Considerations September, 2002 (Revised January, 2006) Icek Ajzen Brief Description of the Theory of Planned Behavior According to the theory

More information

USING SEASONAL AND CYCLICAL COMPONENTS IN LEAST SQUARES FORECASTING MODELS

USING SEASONAL AND CYCLICAL COMPONENTS IN LEAST SQUARES FORECASTING MODELS Using Seasonal and Cyclical Components in Least Squares Forecasting models USING SEASONAL AND CYCLICAL COMPONENTS IN LEAST SQUARES FORECASTING MODELS Frank G. Landram, West Texas A & M University Amjad

More information

The EU Enlargement, and Immigration from Eastern Europe

The EU Enlargement, and Immigration from Eastern Europe The EU Enlargement, and Immigration from Eastern Europe Olivier Blanchard October 2001 Let me start by sketching a toy model of immigration. Think of all the capital as being in the West (Western Europe).

More information

The Economic Benefits of Aviation and Performance in the Travel & Tourism Competitiveness Index

The Economic Benefits of Aviation and Performance in the Travel & Tourism Competitiveness Index CHAPTER 1.4 The Economic Benefits of Aviation and Performance in the Travel & Tourism Competitiveness Index JULIE PEROVIC International Air Transport Association (IATA) The aviation industry supports tourism

More information

Introduction to Dynamic Models. Slide set #1 (Ch 1.1-1.6 in IDM).

Introduction to Dynamic Models. Slide set #1 (Ch 1.1-1.6 in IDM). 1 Introduction Introduction to Dynamic Models. Slide set #1 (Ch 1.1-1.6 in IDM). Ragnar Nymoen University of Oslo, Department of Economics We observe that economic agents take time to adjust their behaviour

More information

Course Objective This course is designed to give you a basic understanding of how to run regressions in SPSS.

Course Objective This course is designed to give you a basic understanding of how to run regressions in SPSS. SPSS Regressions Social Science Research Lab American University, Washington, D.C. Web. www.american.edu/provost/ctrl/pclabs.cfm Tel. x3862 Email. SSRL@American.edu Course Objective This course is designed

More information

Aide-Mémoire. Impact of Currency Exchange Fluctuations on UNHCR s Operations

Aide-Mémoire. Impact of Currency Exchange Fluctuations on UNHCR s Operations Aide-Mémoire Impact of Currency Exchange Fluctuations on UNHCR s Operations 1. Following a request at the thirty-second meeting of the Standing Committee in March 2005, under the agenda item Update on

More information

Professor Christina Romer. LECTURE 17 MACROECONOMIC VARIABLES AND ISSUES March 17, 2016

Professor Christina Romer. LECTURE 17 MACROECONOMIC VARIABLES AND ISSUES March 17, 2016 Economics 2 Spring 2016 Professor Christina Romer Professor David Romer LECTURE 17 MACROECONOMIC VARIABLES AND ISSUES March 17, 2016 I. MACROECONOMICS VERSUS MICROECONOMICS II. REAL GDP A. Definition B.

More information

Practiced Questions. Chapter 20

Practiced Questions. Chapter 20 Practiced Questions Chapter 20 1. The model of aggregate demand and aggregate supply a. is different from the model of supply and demand for a particular market, in that we cannot focus on the substitution

More information

Exchange Rates and Foreign Direct Investment

Exchange Rates and Foreign Direct Investment Exchange Rates and Foreign Direct Investment Written for the Princeton Encyclopedia of the World Economy (Princeton University Press) By Linda S. Goldberg 1 Vice President, Federal Reserve Bank of New

More information

S.Y.B.COM. (SEM-III) ECONOMICS

S.Y.B.COM. (SEM-III) ECONOMICS Fill in the Blanks. Module 1 S.Y.B.COM. (SEM-III) ECONOMICS 1. The continuous flow of money and goods and services between firms and households is called the Circular Flow. 2. Saving constitute a leakage

More information

National Income Accounting

National Income Accounting : A set of rules and definitions for measuring economic activity in the aggregate economy (The economy as a whole.) As we noted earlier, the main measure of aggregate economic activity are GDP and GNP

More information