The impact of relative prices on tourism demand for Mauritius: An empirical analysis

The present study assesses the impact of relative prices on tourism flows in Mauritius. To account for dynamism in tourism flows modelling, a dynamic time series analysis – namely the vector autoregressive model – is employed. The results show that relative price measures have a long-run impact on international tourism flows, indicating that tourists are sensitive to price levels. The relative average cost in the different competing destinations is also reported to be positive and significant, indicating that the impact of relative price changes in foreign destinations competing with Mauritius tourism matters; thus indicating a certain degree of substitutability between Mauritian and its regional competitors’ tourism. Tourism infrastructure, income in country of origin and the island's level of development are confirmed to be key factors in the tourist selection decision. Finally, overall, short-run estimates confirm the above results.     

Out-of-sample forecasting of the Canadian unemployment rates using univariate models

This article investigates the out-of-sample forecasting performance of some linear and nonlinear univariate time series models on the monthly seasonally adjusted Canadian unemployment rates during the 1980–2013 period. The findings reveal that nonlinear time series models better capture the asymmetry present in the unemployment rate series at short and long forecast horizons.     

Explaining Heterogeneity in the Effect of the Exchange Rate and Exchange Rate Volatility on Foreign Direct Investment: A Meta‐Analysis Approach

This study examines the effect of exchange rate and exchange rate volatility on foreign direct investment (FDI) by using a meta‐analysis. We filter out publication bias within the 1,329 estimates, pooled from 101 studies and employ Bayesian Model Averaging to reduce model uncertainty and explain the existing heterogeneity. The results reveal that the exchange rate system, estimation characteristics, and the modeling approach have an important and noticeable influence on the statistical significance and direction of the estimates. On one hand, the impact of exchange rate volatility is relatively lower in countries with higher trade openness, human capital and better protection of intellectual property rights. On the other hand, greater geographical distance and technology gap between the host and the home economy are associated with greater uncertainty and thus accentuate the negative causality between exchange rate volatility and FDI. Such sensitivities suggest that greater emphasis should be placed on reporting estimates of the impact of the exchange rate and its volatility on FDI across a variety of methodological characteristics and specification and estimation choices.     

An Assessment of the Impact of a COMESA Customs Union

Abstract: The Common Market for Eastern and Southern Africa (COMESA) launched its free trade area (FTA) on 31 October 2000 and is in the process of forming a custom union. A Common External Tariff (CET) with respect to all goods imported into the member states from third countries shall be established and maintained. The purpose of this study is three‐fold. The first purpose is to assess the impact of the CET. Here we lowered only external tariffs to all regions leaving tariffs within COMESA as they are now to reflect the real situation. In this scenario, we take into consideration sensitive products which COMESA members might want to exclude from the CET to protect their markets. The second purpose is to implement the COMESA FTA fully. That is, to remove tariff on trade within COMESA states totally. This part of the study will give us an idea on whether countries within COMESA are losing by not implementing the FTA and if so, by how much. The third purpose is to assess the impact of the CET in a fully operational COMESA FTA. The methodology used for this analysis is a Computable General Equilibrium (CGE) — more specifically the Global Trade Analysis Project (GTAP) framework is used. Two standard GTAP closures have been modified to more realistically represent the African economies, namely the employment closure and the trade balance closure.     

Optimal endowments of transport investment: an empirical analysis for mauritius

We investigated the issue of optimality of the provision of transport capital in economic progress. Using an optimization growth model, a condition allowing the assessment of whether public capital would be under- or overprovided was theoretically derived. By deriving a growth equation from a simple production function, we empirically tested this condition for the case of Mauritius during the period 1950–2005. Transport capital is observed to have played an important role in explaining growth of the country. Same is reported for nontransport capital. Interestingly, the null hypothesis that the coefficients of all the types of capital are equal could be rejected, and the estimated coefficient on transport investment proved to be higher than that on private investment (and the nontransport capital). This suggests that transport capital would still be underprovided for the Mauritian case, despite government investment.     

The Impact of Foreign Real Estate Investment on Land Prices: Evidence from Mauritius

This paper examines the impact of foreign real estate on land prices in Mauritius. Using a panel dataset comprising price, quantity and other information for a variety of luxury villas and apartments, we show that the price of land paid by locals has been pushed up by a modest 4–22% in total as a result of these developments. We also examine the determinants of the prices of the dwellings in these schemes, finding that they are strongly related to the sizes of the plots, whether they have ocean views, and the desirability of the region in which they are sited, although there remains considerable unexplained heterogeneity.