Abstract
Uncertainties and risks are two leading factors affecting investors’ decisions. In the presence of uncertainty, investors may postpone consumption and investment decisions due to a wait-and-see policy, whereas consumption and investment decisions may be abandoned in risky situations. Due to its high demand elasticity, in particular, renders tourism as one of the sectors most affected by the increase in uncertainty and risks. In this context, it is aimed to determine whether or not any relationship between global Economic Policy Uncertainty index (EPU), global Geopolitical Risk Index (GPR) and global Volatility Index (VIX) and global tourism index STOXX Global 1800 T&L exists. The probable relationship between the variables is tested using monthly data over the period from August 2006 to December 2018 via Johansen cointegration test and DOLS and FMOLS cointegration coefficient estimators. As a result of the study, it is found that there is a long-term relationship between the related indices and the global tourism index and that the VIX and the EPU indexes have an adverse impact on the tourism index.
Highlights
IntroductionUncertainty is expressed as unmeasurable risks. the development of new methods for the measurement of uncertainty in recent years may indicate that there will be new theoretical developments for finance literature after a while
In the finance literature, uncertainty is expressed as unmeasurable risks
It is seen that the Volatility Index (VIX) has a greater impact on the STOXX Global 1800 T&L index than the Economic Policy Uncertainty Index (EPU) index
Summary
Uncertainty is expressed as unmeasurable risks. the development of new methods for the measurement of uncertainty in recent years may indicate that there will be new theoretical developments for finance literature after a while. New techniques for calculating risks and uncertainties that have been introduced in recent years are based on the repetition of certain keywords in country newspapers or the number of articles written on certain topics. These numbers may indicate some developments and trends in the economy of the relevant country. One of these indexes, the Global Economic Policy Uncertainty Index (EPU), was calculated for the IMF using the method developed by Baker et al (2016). The Geopolitical Risk Index was developed by Caldara and Locaviello (2018) using an algorithm based on the number of news stories containing geopolitical tensions in 11 international newspapers
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
