The econometric analysis of the relationships between selected macroeconomic variables and tourism in Turkey

This thesis consists of three articles which analyze the effects of the tourism demand on international trade, other sectors' incomes and both sectoral and regional inflation and employment. In the first article, we analyze the relationships between tourism demand and international trade by using time varying causality developed by Balcılar, Arslantürk and Özdemir (2010). In the second chapter, we try to determine the effects of tourism demand on other sectors' incomes by using multiple breaks cointegration tests of Maki (2012). Finally, we examine the sectoral and regional effects of tourism demand on inflation and employment by using Swamy's Random coefficients regression. The major findings of the articles indicate that the causal relationships between international trade and tourism demand are time varying and tourism demand has a significant but, smaller effects on other sectors' incomes. Also, the number of both domestic and international tourist's arrival are creating significant effects on both sectoral and regional inflation and employment. Thus, based on the major findings of the study, there is an urgent need to revise the current tourism policies and implement new polices aiming to increase both the number of international arrivals and their contribution to Turkish economy. Keywords: International Tourism Demand, Time Varying Causality, Multiple Breaks Cointegration Tests of Maki, Swamy's Random Coefficients Regression