Abstract:

Being a developing country, Turkey is endeavoring to achieve sustained economic growth. An important tool Turkey uses for sustained economic growth is that of international tourism earnings. In turn higher real income of the country attracts more tourists and leads to higher tourism earnings as well. The direction of causality between income and tourism earnings is tested for Turkey with the help of other variables; those of real export volume and real exchange rate in a multivariate vector autoregressive model. Quarterly data from 1980 to 2011 is (are) used and tourism earnings are shown to be an essential contributor to the real GDP of the country. After the elections in 2002, a more assertive party as regards their setting of tourism targets of international scale came into power. The effects of this new aggressive tourism strategy of the government, and this relationship with the tourism sector are studied for the first time in the literature

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