Abstract:
Tourism is one of the growing service sectors in Nepal. In 2011 the direct and indirect contribution of the Nepal tourism industry to total GDP and employment is expected to reach 6.7% and 2.4% respectively (WTTC, 2011). The objective of this paper is to analyze the role of tourism in Nepalese economic growth. I use a trivariate model of real Gross Domestic Product (GDP), international tourist arrivals, and real effective exchange rate to investigate the long-run and short-run relationship between tourism and economic growth. The Augmented Dickey-Fuller (ADF) test is used to determine the order of integration of the series, and I employ the Engle-Granger cointegration procedure to test for the presence of a long-run relationship. By using annual macroeconomic data for Nepal for the period of 1962-2011, the results reveal that there is a cointegrating relationship between tourism and economic growth. READ MORE>>>
How to cite this paper:
Karki, D (2012). Economic impact of tourism in Nepal’s economy using cointegration and error correction model. Researchgate, 1-15. DOI: 10.13140/RG. 2.1. 4839.5684
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