Testing linearity in the long-run relationship between economic growth and passenger air transport in Mexico

This paper analyzes the dynamic relationship between Mexican air transport expansion and economic growth. To this end, non-parametric cointegration techniques and non-parametric causality tests are introduced and applied to quarterly data of GDP and number of air passengers in Mexico for the period 1995-2013. These procedures allow to test the existence of long run relationship between the variables and to decide whether the model is linear or not. The empirical results show the existence of a cointegration relationship between air transport and economic growth, and that this relationship is linear. In addition, the nonparametric causality tests confirm bidirectional causality between transport and growth.