Abstract
The main goal of this study is to investigate the effect of tourism on the economic growth in Turkey over the period of 1970–2011 using the time-varying parameter and the Kalman filter approaches. The results show that tourists have a positive impact on the economic growth of Turkey. We have found that a 1% increase in the spending of tourists leads to a 0.03% increase in the gross domestic product per capita. In addition, physical and human capital and government consumption expenditure have positive effects on economic growth, while real effective exchange rate has a negative effect on Turkey's economic growth. Finally, this study shows that the product elasticities are inelastic in Turkey during the period of 1970–2011.
Notes
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3. Grossman and Helpman (Citation1991, p. 517) consider the spillover effects of scientific and technological knowledge on foreign trade and economic growth. This is also possible in the tourism industry.