The study examines tourism-led growth hypothesis in the Middle East. A panel gross domestic product (GDP) model is used taking the period of 1985-2012. The results from the Pedroni cointegration test indicated that tourism receipt (TR) is cointegrated with GDP growth (GDP). The dynamic ordinary least-squares test results revealed that TR has a positive long-run effect on GDP in the investigated countries. Moreover, the results from the Granger causality test showed that TR has a positive causal relationship with GDP. Moreover, the results also concluded that the increase in GDP, total trade, and the depreciation of the local currency are essential to promote tourism expansion. From the results, a number of recommendations were provided to increase the tourism expansion of the examined countries.

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House prices in Malaysian cities increased drastically in the past few years, notably in the state of Penang.  The existence of a housing bubble is speculated by major property players. This paper ascertains whether a housing bubble exists in Penang and explores the long-run and short-run determinants of Penang residential prices. Quarterly data (2000Q1 to 2012Q2) of House Price Index is the dependent variable and Gross Domestic Product, Consumer Price Index (CPI), Base Lending Rate (BLR) and Housing Supply as independent variables. Econometric model together with fully modified Ordinary Least Squares regression were used to detect the presence of housing bubble in Penang. The determinants of Penang house prices are based on Granger causality and variance decomposition analysis using the vector autoregressive (VAR) model. The results show no evidence of housing bubble in Penang housing market. CPI has both long-run and short run causality relationship with house prices while CPI and BLR explain a large part of housing price variance. Results show changes in inflation and cost of borrowing will greatly affect Penang house prices.