Macroeconomics

Philosophy

Neuroscience

Financial capital

Microeconomics

Bilateral trade

Distributed lag

Depreciation (economics)

Balance (ability)

Tourism

China

Economics

Cointegration

Liberian dollar

Empirical evidence

Exchange rate

Psychology

Political science

Monetary economics

Epistemology

Econometrics

Capital formation

Medicine

Physical medicine and rehabilitation

International economics

Balance of trade

Us dollar

Finance

Profit (economics)

Currency

Tourism Management

The purpose of this study is to investigate the effects of exchange rate depreciations and appreciations on the tourism trade balance. Specifically, we employed linear and nonlinear autoregressive distributed lag (ARDL) cointegration techniques to analyze the extent to which currency depreciations and appreciations affect the United States (U.S.) bilateral tourism trade with Canada, Mexico, and the United Kingdom (U.K.). The results showed that the depreciation of the U.S. dollar subsequently improves the U.S. trade balance with all three trading partners. However, while the appreciation of the U.S. dollar deteriorates the U.S. bilateral tourism trade balance with Canada and the U.K., it does not ultimately affect the U.S. bilateral tourism trade with Mexico in the long term. These results provide evidence contradicting the J-curve theory, supporting the postulations of the ML condition. Theoretical and policy implications are discussed within the realms of J-curve theory, Marshall-Lerner (ML) condition, international trade, and tourism.

The balance of trade and exchange rates: Theory and contemporary evidence from tourism