Phillips curves are generally estimated under the assumption of linearity and parameter constancy. The conventional Phillips curve argues that there is a trade-o¤ or negative relationship between unemployment and in ‡ation or wage in ‡ation. According to Lucas's critique of econometrics' empirics, however, there is no parameter stability in the forward-looking economic behaviour model of economic agents. Since the rational expectation theory revolution linear models of in ‡ation have been criticised for their poor forecasting performance. Bai and Perron (1998), proposed the methodology which allows for an unknown number of breaks at unknown dates as a response to the mentioned problem. The purpose of this paper

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Does a country with a heavy dependence on a tourism economy have a tendency to succumb to more risk in a recession

Sustainable tourism plays a dominant role in the economic well-being of some of the world’s countries, especially small ones. Tourism earnings account for a significant proportion of their GDP, and they have an overwhelming reliance on tourism as a source of service exports. The general trends in tourism earnings and volatilities in country risk ratings often go hand in hand, especially for small touristic countries in that region. The research presented in this paper provides a comparative assessment of the international country risk ratings and highlights the importance of their tourism earnings and tourism export. This study employs the ordered response and Poisson count panel data model for a sample of twenty-two countries most reliant on tourism, including Mediterranean countries. The aim of this study is to investigate whether the tourism determinants of sovereign credit ratings for those countries vary between different rating agencies (Standard & Poor’s, Moody’s and Fitch’s). The key finding is that an increase in tourism earnings as a proportion of GDP and as the main export share in the total country export impairs the sovereign risk rating and turns out to be robust across the different methodologies.

Purpose -The purpose of the paper was to discover new ways of extending the tourist season through wine tourism. The survey detected which factors are crucial for wine, positive "push" motives of "tourism terroir", wine consumption and satisfaction with wine cellar visits. Methodology -During the IPA/EFRR project "Malvasia TourIstra" a survey was conducted on two convenient samples. Wine cellar owners were selected by their production of high quality autochthonous wines with protected geographic origin. Wine cellar visitors were individual visitors at wine cellars. Two questionnaires were created as research tools for the survey. Findings -Our findings confirm critical factors of wine tourism, describe "push" and "pull" factors for Istria wine tourism, interest in wine itineraries and perceptions of autochthonous wine. Contribution -Our findings might contribute to the development of innovative wine related tourist itineraries that can extend the tourist season.