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Tourism and economic development in a cash-in-advance economy

journal contribution
posted on 2005-09-01, 00:00 authored by Chi-Chur Chao, B Hazari, Pasquale Sgro
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.

History

Journal

Research in international business and finance

Volume

19

Issue

3

Pagination

365 - 373

Publisher

Elsevier Science Direct

Location

London, England

ISSN

0275-5319

eISSN

1878-3384

Language

eng

Notes

Available online 1 July 2005.

Publication classification

C1 Refereed article in a scholarly journal

Copyright notice

2005, Elsevier B.V.

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