Tourist arrivals in four major economies: another side of economic policy uncertainty and fear

Abstract

In this paper, we examine the direction of causal relationships among migration-related fear, economic policy uncertainty, tourism, and economic growth in the panel economies of France, Germany, the UK, and the USA. To the best of our knowledge, this study is the first to examine the interaction and interrelationship between these variables in a multivariate causality study, using a quarterly data over the period 1985Q1-2017Q4 via time-series causality approach as advanced by Emirmahmutoglu and Kose (Econ Model 28:870-876,2011) that produces country-specific causality statistic and also captures slope heterogeneity in panel data. Empirical results show that migration-related fear is linked with EPU, tourism arrivals, and real income. Thus, we suggest fear-induced economic policy uncertainty, fear-induced tourism, and economic policy uncertainty-induced growth hypotheses with credible policy suggestions for tourist destinations.