Exchange rate pass‐through to restaurant and hotel prices in the United States
The role of energy prices and tourism development
Bibliographic Data
| ID | 12705483 |
|---|---|
| Authors | Ojonugwa Usman (0000-0002-6459-9898, School of Business Education Federal College of Education (Technical) Potiskum Yobe Nigeria, corresponding author), Paul Terhemba Iorember (0000-0002-3092-2378, Faculty of Social Sciences Nile University of Nigeria Abuja Nigeria), Gylych Jelilov (0000-0002-7428-7361, Department of Economics Nile University of Nigeria Abuja Nigeria) |
| Year | 2020 |
| Volume | 21 |
| Issue | 2 |
| Publication date | 2020-07-22 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Journal of Public Affairs (JOURNAL) |
| Journal identifiers | ISSN: 1472-3891 • E-ISSN: 1479-1854 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1002/pa.2214 |
| OpenAlex | W3045490056 |
| Language | EN |
| Citations received | 5 |
| References cited | 35 |
This study incorporates energy prices and tourism development into the standard purchasing power parity doctrine to investigate exchange rate pass‐through to restaurant and hotel prices in the United States over the period 2001:Q4 to 2017:Q4. We apply the multiple structural breaks cointegration test and flexible autoregressive distributed lag (ARDL) method. Our empirical results provide evidence that exchange rate appreciation reduces restaurant and hotel prices while an increase in energy prices and tourism development causes the prices of restaurant and hotel to rise. However, the pass‐through of exchange rate, energy prices, and tourism development is incomplete in both the long‐ and short‐run with the long‐run pass‐through having a stronger effect. Furthermore, the causality results show that restaurant and hotel prices have predictive power for exchange rate. Causality between restaurant and hotel prices and tourism development has a feedback effect. We also find that exchange rate Granger causes not only energy prices but tourism development while tourism development causes energy prices. The policy implications for these results are carefully outlined in the study
Cointegration · Distributed lag · Econometrics · Economics · Exchange rate · Exchange-rate pass-through · Granger causality · Macroeconomics · Monetary economics · Purchasing power parity · Short run · Tourism · Energy, Environment, and Transportation Policies · Energy, Environment, Economic Growth · Market Dynamics and Volatility
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| Citations per year | 0.83 |
|---|---|
| Citation span | 2020 - 2023 (4) |
| Highly cited | No |