Tourism sector entails both costs and benefits to the economy. The costs are mainly emphasized as opportunity costs. On the other hand tourism revenues may have growth promoting potential benefits: It is a source for deriving foreign exchange which can be used to import capital goods for productive purposes. Thus, a rise in tourism revenues may result in higher production and employment. This paper examines empirically the effects of tourism revenues on economic growth in Turkey for the time period 1962-2002, in a VAR framework. The empirical findings indicate that even though there is growth promoting effects of tourism revenues in the long-run, there is no short-run relationship between tourism and economic growth.
Tourism, economic growth, Turkey, VAR