Tourism, Taxes And Immiserization: A Trade Theoretic Analysis
Many countries promote tourism as a device for earning foreign exchange and promoting domestic welfare and growth. In all these countries the non-traded goods (internationally not traded) are consumed by both domestic residents and tourists. It is well known that the relative price of non-traded goods and services is determined in the local market - hence the tourist demand results in monopoly power in trade for the host country. We use a very simple two-country model to demonstrate the specific nature of the offer curve and the trade equilibrium and the difficulties of taxation. Copyright 2003 Blackwell Publishers Ltd
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Volume (Year): 8 (2003)
Issue (Month): 3 (October)
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