Tourism is Fiji's largest industry in terms of export earnings and employment. In this paper we investigate the nexus between tourism receipts and real gross domestic product (GDP) in Fiji. Specifically, we test whether the two variables are cointegrated and using Granger causality tests we establish the direction of causation between the two. We find that there is a cointegration relationship when real GDP is the dependent variable. On the direction of causation we find that in the short-run real GDP Granger causes tourism receipts while in the long-run tourism receipts Granger cause real GDP.
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