Testing and Estimating Nonlinear Long-Run Relationships between Economic Growth and Passenger Air Transport in Four South American Countries

11 Pages Posted: 9 Mar 2018

See all articles by Juan Gabriel Brida

Juan Gabriel Brida

Universidad de la República

Bibiana Lanzilotta

Instituto de Economía - FCEA UdelaR; Centro de Investigaciones Economicas (CINVE - Uruguay)

Silvia Rodríguez-Collazo

Universidad de la República

Sandra Zapata-Aguirre

Universidad de la República; Universidad de la Republica - Facultad de Ciencias Económicas y de Administración; Universidad de la Republica

Date Written: March 6, 2018

Abstract

This short paper analyzes the dynamic relationship between air transportation and economic growth in four South American countries, Argentina, Brazil, Chile and Uruguay, investigating the linkages without imposing a priori any parametric model to represent them. A set of free-model tests (unit root, cointegration and causality non-parametric tests) are applied to annual data (from 1970 to 2015) of per capita GDP and air transport indicators (passengers and cargo) to examine the existence of linear and nonlinear relationships between these variables. Real exchange rate is introduced in each country model in order to account for the price-effects. Results show that only Uruguay and Chile show a cointegration relationship between economic growth and air transport (and when number of air passengers represents this variable). Linearity (of the long-run relationship) was rejected for both countries, which means that the relationship between air transport and growth may have some kind of asymmetry or non-linear behavior. Nor for Argentina or Brazil and neither when air transport is represented by air cargo indicator, cointegration was found. Furthermore, nonparametric causality tests, confirm bidirectional causality from air transport to growth in Uruguay and Chile.

Keywords: air transport and growth, nonlinear co-integration; non-parametric causality tests; MERCOSUR & Chile

JEL Classification: C30; E43; L83

Suggested Citation

Brida, Juan Gabriel and Lanzilotta, Bibiana and Rodríguez-Collazo, Silvia and Zapata-Aguirre, Sandra, Testing and Estimating Nonlinear Long-Run Relationships between Economic Growth and Passenger Air Transport in Four South American Countries (March 6, 2018). Available at SSRN: https://ssrn.com/abstract=3135459 or http://dx.doi.org/10.2139/ssrn.3135459

Juan Gabriel Brida (Contact Author)

Universidad de la República ( email )

Av. 18 de Julio
Montevideo, 1968
Uruguay

Bibiana Lanzilotta

Instituto de Economía - FCEA UdelaR ( email )

Montevideo
Uruguay

Centro de Investigaciones Economicas (CINVE - Uruguay) ( email )

Uruguay 1242
Montevideo, 11100
Uruguay

HOME PAGE: http://www.cinve.org.uy

Silvia Rodríguez-Collazo

Universidad de la República ( email )

Avenida 18 de Julio 182
Montevideo, 11100
Uruguay

Sandra Zapata-Aguirre

Universidad de la República

Av. Cachimba del Rey Esq. Bvar. Artigas
Maldonado, Maldonado 20000
Uruguay
+5984225 5326 (Phone)

HOME PAGE: http://https://www.cure.edu.uy/

Universidad de la Republica - Facultad de Ciencias Económicas y de Administración ( email )

Gonzalo Ramirez 1926
Montevideo, 11200
Uruguay

Universidad de la Republica ( email )

Gonzalo Ramirez 1926
Montevideo, 11200
Uruguay

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