Tourism and Growth in a Dynamic Model of Trade

Hazari, Bharat R.; Sgro, Pasquale M.

doi:10.1108/s0573-8555(2004)0000265012

Cited by 86 publications

(83 citation statements)

References 8 publications

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“…However, unlike tc ; atc is also a¤ected by the parameters and : The way this parameters a¤ect atc is ambiguous 16 It is interesting to note that, in this case, the total taxation ( atc + z = 1…”

Section: "Tragedy Of the Commons" Externality And Corrective Policymentioning

confidence: 99%

“…Moreover, during the last 20 years, the growth performance of tourism economies has been better than the average of the OECD countries. A bunch of papers (Hazari and Sgrò, 1995, Lanza and Pigliaru, 1994, Smeral, 2003, and 1 Nowak and Sahli, 2005, among them) have tried to provide an explanation for such stylized facts. A common result of these works is that the positive growth performance can be considered a long-run equilibrium phenomenon once we allow tourism countries to "import" growth from abroad by means of continual gains in the terms of trade.…”

Section: Introductionmentioning

confidence: 99%

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Tourism Specialization and Environmental Sustainability in a Dynamic Economy

Cerina

2007

Tourism Economics

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This study focuses on the dynamic behaviour of a small open economy specialized in tourism based on natural resources. The author analyses the steady-state properties in two scenarios, with and without public abatement expenditures, and a unique local saddle-point equilibrium is found for both cases. The analysis of the dynamics provides an alternative explanation for the observed positive growth performance of small open tourism-based economies and for the worldwide increases in tourist inflows, which are seen as transitional phenomena towards the path to the steady state. Moreover, in defining the conditions under which tourism development, improvements in environmental quality and economic growth can simultaneously occur, the model provides theoretical microfoundations for sustainable tourism. Finally, in both scenarios, the author analyses the issue of market failures, taking into account two different kinds of externality and finding the respective optimal tax rates that will induce private agents to replicate the social optimum.

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Section: "Tragedy Of the Commons" Externality And Corrective Policymentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Tourism Specialization and Environmental Sustainability in a Dynamic Economy

Cerina

2007

Tourism Economics

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“…The following are some of the few exceptions: Hazari and Sgro (1995) investigate the relationship between growth in tourism, capital accumulation, per capita consumption and the terms of trade in a dynamic setting. They show that an increase of the international demand for tourism produces a positive effect on long-run economic growth, and that in the small country case welfare necessarily increases with the growth in tourist consumption of nontraded goods.…”

Section: Introductionmentioning

confidence: 99%

Dynamic Model of Economic Growth in a Small Tourism Driven Economy

Schubert

Brida

2011

Tourism Economics

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The paper studies the dynamics of economic growth caused by an increase in the growth rate of tourism demand.We develop a simple dynamic model of a small open economy, which is completely specialized in the production of tourism services (island economy model), populated by a large number of intertemporally optimizing agents, deriving utility from consuming an imported good. Tourism services are produced by means of a simple AK technology by using imported capital, its accumulation associated with adjustment costs. Moreover, the economy can lend or borrow at the international financial markets at the given world interest rate. Adjustments in the relative price of tourism services ensure market clearance for tourism services.The long-run growth rate of the economy is tied to the growth rate in tourism demand. An increase in the latter increases thus the economy's long-run balanced growth rate. In contrast to the standard one-good small open economy endogenous growth model, where the economy is always on its balanced growth path, we show that there are transitional dynamics after an increase in the growth rate of tourism demand. In particular, the short-run growth rate of output rises gradually towards its higher long-run level, and the market price of tourism increases during transition. Thus, an increase in the growth of tourism demand, say, caused by higher economic growth abroad, leads to a boom in the small open economy and increasing terms of trade. Adjustments of the relative price of tourism services (i. e. the real exchange rate) can therefore not protect the economy from demand disturbances.

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“…See de Kadt, (1979), WTO (1998), while on the issue of tax revenue for the government, Bird, (1992), and to promote growth, Hazari and Sgro, (1995).…”

mentioning

confidence: 99%

“…For further elaboration on the differences between tourism trade and commodities trade, see Copeland (1991), Hazari and Sgro (1995), Hazari and Nowak (2000).…”

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confidence: 99%

Tourism, Trade and Domestic Welfare

Nowak

Sahli

Sgro

2003

Pacific Economic Review

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The opinions expressed in this paper do not necessarily reflect the position of Terms of use: Documents in Fondazione Eni Enrico Mattei Tourism, Trade and Domestic Welfare SummaryTourism has been regarded as a major source of economic growth and a good source of foreign exchange earnings. Tourism has also been considered as an activity that imposes costs on the host country. Such costs include increased pollution, congestion and despoliation of fragile environments and intra-generational inequity aggravation. One aspect that has been ignored is the general equilibrium effects of tourism on the other sectors in the economy. These effects can be quite substantial and should be taken into account when assessing the net benefits of a tourism boom on an economy. This paper presents a model which captures the interdependence between tourism and the rest of the economy, in particular agriculture and manufacturing. We examine the effect of a tourist boom on structural adjustment, commodity and factor prices and more importantly resident welfare. An important result obtained is that the tourist boom may "immiserize" the residents. This occurs because of two effects. The first, a favourable effect due to an increase in the relative price of the non-traded good which is termed the secondary terms of trade effect. The second, a negative effect due to an efficiency loss that occurs in the presence of increasing returns to scale in manufacturing. If this second effect outweighs the first effect, resident immiserization occurs.

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Tourism and Growth in a Dynamic Model of Trade

Cited by 86 publications

References 8 publications

Tourism Specialization and Environmental Sustainability in a Dynamic Economy

Tourism Specialization and Environmental Sustainability in a Dynamic Economy

Dynamic Model of Economic Growth in a Small Tourism Driven Economy

Tourism, Trade and Domestic Welfare

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