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This paper improves short-term forecasting models of monthly tourism arrivals by estimating and evaluating a time-series model with exogenous regressors (ARIMA-X) using a case of Aruba, a small open tourism-dependent economy. Given importance of the US market for Aruba, it investigates informational value of Google Searches originating in the USA, flight capacity utilization on the US air-carriers, and per capita demand of the US consumers, given the volatility index in stock markets (VIX). It yields several insights. First, flight capacity is the best variable to account for the travel restrictions during the pandemic. Second, US real personal consumption expenditure becomes a more significnat predictor than income as the former better captured impact of the COVID-19 restrictions on the consumers’ behavior, while income boosted by the pandemic fiscal support was not fully directed to spending. Third, intercept correction improves the model in the estimation period. Finally, the pandemic changed econometric relationships between the tourism arrivals and their main determinants, and accuracy of the forecast models. Going forward, the analysts should re-estimate the models. Out-of-sample forecasts with 5 percent confidence intervals are produced for 18 months ahead.

Macroeconomics --- Economics: General --- Industries: Hospital,Travel and Tourism --- Diseases: Contagious --- Forecasting --- Production and Operations Management --- Labor --- Time-Series Models --- Dynamic Quantile Regressions --- Dynamic Treatment Effect Models --- Diffusion Processes --- Forecasting and Other Model Applications --- Macroeconomic Aspects of International Trade and Finance: Forecasting and Simulation --- Sports --- Gambling --- Restaurants --- Recreation --- Tourism --- Health Behavior --- Macroeconomics: Production --- Unemployment: Models, Duration, Incidence, and Job Search --- Economic & financial crises & disasters --- Economics of specific sectors --- Hospitality, leisure & tourism industries --- Infectious & contagious diseases --- Economic Forecasting --- Labour --- income economics --- Economic sectors --- COVID-19 --- Health --- Economic forecasting --- Capacity utilization --- Production --- Unemployment rate --- Currency crises --- Informal sector --- Economics --- Communicable diseases --- Industrial capacity --- Unemployment --- Aruba, Kingdom of the Netherlands

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This paper uses the Growth-at-Risk (GaR) methodology to examine how macrofinancial conditions affect the growth outlook and its probability distribution. Using this approach, we evaluate risks to GDP growth in the Dominican Republic using quarterly data for 1996-2018. We group macrofinancial conditions in five principal determinants, based on 32 indicators. The Dominican Republic’s growth distribution appears most vulnerable to negative shocks to domestic financial conditions, domestic leverage, domestic demand, and external demand, with additional repercussions from the external cost of borrowing in the longer run. Our findings show that domestic monetary policy plays a particularly important role in reducing growth vulnerabilities when the economy is weak.

Finance: General --- Macroeconomics --- Money and Monetary Policy --- Financial Markets and the Macroeconomy --- Economic History: Macroeconomics --- Growth and Fluctuations: Latin America --- Caribbean --- Model Construction and Estimation --- Forecasting and Other Model Applications --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Portfolio Choice --- Investment Decisions --- Monetary Growth Models --- Monetary economics --- Finance --- Credit --- Liquidity --- Macrofinancial linkages --- Growth-at-risk assessment --- Money --- Asset and liability management --- Financial sector policy and analysis --- Economics --- Financial services industry --- Financial risk management --- Dominican Republic

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After providing a general overview of the nature, pros, and cons of crypto assets and CBDCs, this paper focuses on documenting their recent experience in LAC. The region records a high interest in unbacked crypto assets and stablecoins and its authorities’ policy responses have varied substantially, ranging from the introduction of Bitcoin as legal tender in El Salvador to their prohibition in many other countries worried about their impact on financial stability, currency/asset substitution, tax evasion, corruption, and money laundering. This paper also describes briefly the results of a survey on CBDCs’ introduction plans and crypto assets regulation. Finally, this paper presents some general lessons and policy recommendations for the region on the regulation of cypto assets, digital currencies and cross-border payments, and on the potential introduction of CBDCs.

Macroeconomics --- Economics: General --- Industries: Financial Services --- Finance: General --- Money and Monetary Policy --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Central Banks and Their Policies --- International Factor Movements and International Business: General --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Economic & financial crises & disasters --- Economics of specific sectors --- Distributed ledgers --- Finance --- Monetary economics --- Virtual currencies --- Technology --- Central Bank digital currencies --- Digital currencies --- Payment systems --- Financial markets --- Currencies --- Money --- Currency crises --- Informal sector --- Economics --- Financial services industry --- Technological innovations --- Clearinghouses --- Banking --- El Salvador