Tourism and economic development in a cash-in-advance economy
Chao, Chi-Chur, Hazari, Bharat and Sgro, Pasquale 2005, Tourism and economic development in a cash-in-advance economy, Research in international business and finance, vol. 19, no. 3, pp. 365-373.
Attached Files
(Some files may be inaccessible until you login with your Deakin Research Online credentials)
Name
Description
MIMEType
Size
Downloads
Title
Tourism and economic development in a cash-in-advance economy
This paper examines the impact of tourism on welfare in a cash-in-advance economy. As a result of the expansion in tourism, the price of the non-traded good increases. This gives rise to a terms-of-trade improvement. However, the cash-in-advance constraint causes a distortion in consumption. For tourism demand, where the gain from the terms-of-trade improvement dominates (does not dominate) the loss from the consumption distortion, tourism is welfare-improving (welfare-reducing). A similar condition for welfare improvement (deterioration) holds for a model of capital inflow and endogenised tourism.