In many developing countries, remittance payments from migrant workers are increasingly becoming a significant source of export income. This article investigates the causal link between remittances and economic growth in three countries, Bangladesh, India and Sri Lanka, by employing the Granger causality test under a Vector Autoregression (VAR) framework (Granger, C.W.J. (1988) Some recent developments in the concept of causality. Journal of Econometrics, 39, pp. 199–211). Using time series data over a 25-year period, we found that growth in remittances does lead to economic growth in Bangladesh. In India, there seems to be no causal relationship between growth in remittances and economic growth; but in Sri Lanka, a two-way directional causality is found; namely economic growth influences growth in remittances and vice-versa. The article also discusses a number of policy issues arising from the causality results.

This paper investigates the causal link between foreign direct investment and tourism in China by employing the Granger causality test under a VAR framework proposed by Zapata and Rambaldi (1997). Only a one-directional causality is found from foreign direct investment to tourism. This explains the rapid growth in the tourism market in China during the past decade.

India's liberalization and deregulation policies during the early 1990s have attracted a huge amount of foreign direct investment (FDI) into India in recent years. India has been ranked as the second most favored FDI destination in the world, just behind China. Policy makers in many countries believe that FDI will lead their country's overall development, including the tourism sector. This article investigates the causal link between FDI and tourist arrivals in India by employing the Granger causality test under a VAR framework. A two-way causality link is found between FDI and tourist arrivals in India. This explains the rapid growth in the tourism sector as well as FDI in India during the last decade. Our two-way causality results in relation to India are similar to the findings of a number of small island developing states (SIDS).

This paper analyses the consumption patterns of the three beverages beer, wine and spirits in nine countries, Australia, Canada, Finland, Japan, New Zealand, Norway, Sweden, the UK and the US, using the Rotterdam demand system. A cross-country comparison of the results shows that in most countries (i)wine consumption has grown at a fasteer rate than beer and spirits; (ii) the proportion of consumers' expenditure on alcohol is declining; (iii)beer is a necessity and spirits is a luxury; (iv)the demand for the three beverages is price inelastic; and (iv)all three beverages are pair-wise substitutes. We also investigated the hypothesis of identical parameters for all countries by pooling the data across countries and found that the data do not support the hypothesis.