The influence of economic policy uncertainty and geopolitical risk on US citizens overseas air passenger travel by regional destination

This research note extends the literature on the role of economic policy uncertainty and geopolitical risk on US citizens overseas air travel through the examination of the forecast error variance decomposition of total overseas air travel and by regional destination. Our empirical findings indicate that across regional destinations, US economic policy uncertainty explains more of the forecast error variance of US overseas air travel, followed by geopolitical risk with global economic policy uncertainty explaining a much smaller percentage of the forecast error variance.

Automated summary

The research shows that US economic policy uncertainty has a larger impact on the forecast error variance of US overseas air travel compared to geopolitical risk. Global economic policy uncertainty has a much smaller influence on the forecast error variance.