Causality between economic growth and air transport expansion: Empirical evidence from Mexico

This paper analyses the effects in the long-run between air transport demand and the economic growth in Mexico. Using quarterly data from 1995qIII to 2013qIV, the study investigates possible causal relationships between real GDP and number of air passengers in arriving and departing from Mexican airports. Johansen cointegration analysis shows the existence of one cointegrated vector where the corresponding elasticities are positive. The study shows that the causality relationship is positive and bidirectional. Impulse response analysis shows that an increase in the magnitude of air transport expansion in Mexico produces a positive effect on economic growth in the country.