Exchange rate pass‐through to restaurant and hotel prices in the United States: The role of energy prices and tourism development

Abstract

This study incorporates energy prices and tourism development into the standard purchasing power parity doctrine to investigate exchange rate pass‐through to restaurant and hotel prices in the United States over the period 2001:Q4 to 2017:Q4. We apply the multiple structural breaks cointegration test and flexible autoregressive distributed lag (ARDL) method. Our empirical results provide evidence that exchange rate appreciation reduces restaurant and hotel prices while an increase in energy prices and tourism development causes the prices of restaurant and hotel to rise. However, the pass‐through of exchange rate, energy prices, and tourism development is incomplete in both the long‐ and short‐run with the long‐run pass‐through having a stronger effect. Furthermore, the causality results show that restaurant and hotel prices have predictive power for exchange rate. Causality between restaurant and hotel prices and tourism development has a feedback effect. We also find that exchange rate Granger causes not only energy prices but tourism development while tourism development causes energy prices. The policy implications for these results are carefully outlined in the study.

Asymmetric effects of monetary policy shocks on output growth in Nigeria: Evidence from nonlinear ARDL and Hatemi‐J causality tests

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Towards mitigating ecological degradation in G-7 countries: accounting for economic effect dynamics, renewable energy consumption, and innovation

“…Moreover, the Kyoto Protocol Agreement in 1997, the Doha Agreement in 2012, the Paris agreement (COP 21) in 2015, the Sustainable Development Goals (SGDs) in 2016, and other stakeholder engagements all suggest that the current trends in energy consumption is unsustainable and should be reversed. Consequently, many countries including the biggest consumers of fossil fuels such as the US, Germany, China, France, Sweden, Norway, and Italy have adopted decarbonization strategies that ensure a smooth transition to the use of renewables – which have low levels of carbon content ( Kannan and Marappan, 2011 ; Timmons et al., 2014 ; International Energy Agency, 2015 ; Iorember et al., 2020 ; Ike et al., 2020a ; Usman et al., 2021a ).…”

Reconsidering the nexus between monetary policy and economic growth in Nigeria: The role of interest rate, money supply, and financial inclusion

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