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The Travel Shock

Author

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  • Gian Maria Milesi-Ferretti

    (The Brookings Institution)

Abstract

The COVID-19 pandemic led to a collapse in international travel and tourism in 2020. We explore how the impact of the pandemic relates to countries’ dependence on tourism revenues. We document the collapse of net revenues from international travel in tourism-dependent economies, and show that the share of tourism in GDP is the most important predictor of the pandemic-induced growth shortfall in 2020 across countries, even when compared to measures of pandemic severity. Countries more dependent on foreign tourism were affected particularly severely, including by lockdowns in the countries of origin of their tourists.

Suggested Citation

  • Gian Maria Milesi-Ferretti, 2024. "The Travel Shock," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 72(4), pages 1502-1519, December.
    • Handle: RePEc:pal:imfecr:v:72:y:2024:i:4:d:10.1057_s41308-023-00224-9
    DOI: 10.1057/s41308-023-00224-9
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    References listed on IDEAS

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    1. Lane, Philip R. & Milesi-Ferretti, Gian Maria, 2012. "External adjustment and the global crisis," Journal of International Economics, Elsevier, vol. 88(2), pages 252-265.
    2. Philip R Lane & Gian Maria Milesi-Ferretti, 2011. "The Cross-Country Incidence of the Global Crisis," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 59(1), pages 77-110, April.
    3. Sarah Osborne, 2022. "U.S. Travel and Tourism Satellite Account for 1999–2022," Survey of Current Business, Bureau of Economic Analysis, February.
    4. Sarah Osborne, 2022. "U.S. Travel and Tourism Satellite Account for 1999�2022," Survey of Current Business, Bureau of Economic Analysis, vol. 102(2), pages 1-4, February.
    5. André Sapir, 2020. "Why has COVID-19 hit different European Union economies so differently?," Bruegel Policy Contributions 38303, Bruegel.
    6. Muggenthaler, Philip & Schroth, Joachim & Sun, Yiqiao, 2021. "The heterogeneous economic impact of the pandemic across euro area countries," Economic Bulletin Boxes, European Central Bank, vol. 5.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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