I need to examine Tourism Led Growth hypothesis for Uzbekistan, CIS country. Can I use GDP growth rates instead of GDP to check whether cointegration relationship exists between economic growth and tourism development in Uzbekistan? Because GDP (real, nominal, per capita) in any forms is I(2), GDP growth rates and tourism variables are I(1).
P.S. When I performed different Cointegration and causality tests with economic growth rates, international tourism arrivals and tourism receipts TLGH holds for Uzbekistan. These tests show reciprocal cointegration relationship between variables.
Nilufar,
It would be better to use the growth variable which is I (1) and use the bounds testing approach providing the variables are I (1) or I (0). If you do a search in one of the applied journals, like Applied Economics, you will see quite a few good applications of the bounds testing method. These articles will also lead you to appropriate citations and methodology. See the following study on tourism and the methodology you may want to use:
https://www.cavehill.uwi.edu/fss/econ/research-and-publications/docs/impactofclimatechangeonthetourismdemandv4_001.aspx
Good luck!
Thank you very much for such a helpful suggestions, I shall try to use them in my research
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