The central aim of this paper is to investigate whether shocks to Fiji's tourism industry have a permanent effect or a transitory effect on tourist expenditure in Fiji. To accomplish this aim the Zivot and Andrews (1992) one break test and the Lumsdaine and Papell (1997) two break tests are used. The one break and two break tests reveal 1987 - the year of the military coups in Fiji - as the year of the break. Moreover, it is possible to reject the unit root null leading to the conclusion that shocks to Fiji's tourism industry have a transitory effect on tourist expenditure in Fiji.
Field of Research
140212 Macroeconomics (incl Monetary and Fiscal Theory)