TOURISM, TRADE, EXTERNALITIES, AND PUBLIC GOODS IN A THREE-SECTOR GROWTH MODEL
Journal Title: UTMS Journal of Economics - Year 2015, Vol 6, Issue 1
Abstract
The purpose of this study is to introduce tourism, externalities, and public goods to a small-open growth with endogenous wealth and public goods supply. We develop the model on the basis of the Solow-Uzawa growth model, the neoclassical neoclassical growth theory with externalities, and ideas from tourism economics. The economy consists of three – service, industrial, and public - sectors. The production side is based on the traditional growth theories, while the household behavior is described by an alternative utility function proposed by Zhang. We introduce endogenous land distribution between housing and supply of services. The industrial and service sectors are perfectly competitive subject to the government’s taxation. The public sector is financially supported by the government. We introduce taxes not only on producers, but also on consumers’ incomes from wage, land, and interest of wealth, consumption of goods and services, and housing. We simulate the motion of the national economy and show the existence of a unique stable equilibrium. We carry out comparative dynamic analysis with regard to the rate of interest in the global market, the total productivity of the service sector, tax rate on the service sector, tax rate on consumption of services, human capital, the propensity to consume services, and the impact of public services on the productivity of the industrial sector. The comparative dynamic analysis provides some important insights into the complexity of open economies with endogenous wealth, public goods, and externalities.
Authors and Affiliations
Wei-Bin Zhang
Keywords
Related Articles
- EP ID EP274032
- DOI -
- Views 114
- Downloads 0
RECOGNIZING THE VULNERABILITY OF GENERATION Z TO ECONOMIC AND SOCIAL RISKS
Generation Z, known also as “Net generation” and “Digital natives”, is of particular interest for researchers do to its specifics originating from the changes caused in the everyday’s live by the new technologies. This c...
PARALEL AND MULTILAYER ECONOMIC DUALITIES: AN EXAMPLE FROM HUNGARY
Dualities in an economy may emerge for various reasons, but the general stereotype of high-tech foreign firms at odds with underdeveloped local ones seems to be an oversimplification of the problem. Building on a sample...
SOCIO-ECONOMIC STATUS OF WOMEN BEEDI WORKERS IN BUNDELKHAND REGION OF UTTAR PRADESH: AN EMPIRICAL ANALYSIS
The central idea of this paper is to explore link between socio-economic positions of women working in unorganized sector with special reference to beedi rolling. In India Beedi making is an age old industry and one of t...
ADVERTISING INDUSTRY - TRENDS, OPPORTUNITIES AND CHALLENGES WITH SPECIAL EMPHASIS OF CHINESE TOURISM
Now day advertising has craftily become an inescapable companion of modern life that we can't escape and avoid it, truly it’s an intrinsic part of our daily lives. Advertising affects everyone’s life and influences many...
CRM DEVELOPMENT IN HOSPITALITY COMPANIES FOR THE PURPOSE OF INCREASING THE COMPETITIVENESS IN THE TOURIST MARKET
CRM as a trend in business and business philosophy consists of a series of complex and diverse business resources such as: modern technological resources, information resources, human resources and all other procedural r...