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Turner College Economist Explores Business Cycles and Tourism Departures in the South Pacific

Demand for international tourism tends to rise during economic expansions and fall during economic contractions.  In other words, it is pro-cyclical.  However, the response of tourism demand to business cycles may vary across contractionary and expansionary phases.  Furthermore, tourism demand and business cycles may not be synchronous.  These are other issues are explored by Turner College economics professor Frank Mixon and colleagues at Lincoln University (New Zealand) and the University of New Haven in their study appearing in the November 2022 issue of Tourism Economics.  To conduct the study, Mixon and his colleagues analyze quarterly data on tourism departures and real GDP for Australia and New Zealand.  The key findings of this study are that tourism demand in both Australia and New Zealand is pro-cyclical, tourism demand cycles in New Zealand strongly lag business cycles by one year, whereas in Australia, they weakly lag business cycles by one quarter, and, overall, tourism demand and business cycles in New Zealand share a stronger association than they do in Australia.

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