Exchange rate regimes and tourism

Abstract

The main objective of this paper is to analyse the effect of exchange rate arrangements on international tourism. The ambiguity the literature about the effect of exchange rate volatility contrasts with the magnitude of the impact of a common Currency on trade. The authors apply panel data techniques to analyse the relevance of a common Currency to tourism, finding that it is a major factor in the determination Of tourist arrivals. They also analyse the impact of several de facto exchange rate arrangements on tourism, finding chat less flexible exchange rates promote tourism.