Tourism, Jobs, Capital Accumulation and the Economy: A Dynamic Analysis

35 Pages Posted: 28 Nov 2005

See all articles by Chi-Chur Chao

Chi-Chur Chao

Chinese University of Hong Kong - Department of Economics; Deakin University; Financial Research Network (FIRN)

Bharat R. Hazari

City University of Hong Kong

Jean‐Pierre Laffargue

Université Paris I Panthéon-Sorbonne - Centre Maison des Sciences Economiques; CEPREMAP

Pasquale M. Sgro

Deakin University - Department of Economics

Eden S. H. Yu

City University of Hong Kong - Department of Economics & Finance; Chu Hai College of Higher Education

Date Written: November 2005

Abstract

This paper examines the effects of tourism in a dynamic model of trade on unemployment, capital accumulation and resident welfare. A tourism boom improves the terms of trade, increases labor employment, but lowers capital accumulation. The reduction in the capital stock depends on the degree of factor intensity. When the traded sector is weakly capital intensive, the expansion of tourism improves welfare. However, when the traded sector is strongly capital intensive, the fall in capital can be a dominant factor in lowering national welfare. This dynamic immiserizing result of tourism on resident welfare is confirmed by simulations on German data.

Keywords: Tourism, employment, capital accumulation, welfare

JEL Classification: O10, F11

Suggested Citation

Chao, Chi-Chur and Chao, Chi-Chur and Hazari, Bharat Raj and Laffargue, Jean-Pierre and Sgro, Pasquale Michael and Yu, Eden S. H., Tourism, Jobs, Capital Accumulation and the Economy: A Dynamic Analysis (November 2005). FEEM Working Paper No. 136.05, Available at SSRN: https://ssrn.com/abstract=855904 or http://dx.doi.org/10.2139/ssrn.855904

Chi-Chur Chao

Chinese University of Hong Kong - Department of Economics

Shatin, N.T.
Hong Kong
852 2603 5805 (Fax)

Deakin University ( email )

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

Bharat Raj Hazari

City University of Hong Kong ( email )

Tat Chee Avenue
Kowloon, Kowloon
Hong Kong
61 3 98502036 (Phone)

Jean-Pierre Laffargue

Université Paris I Panthéon-Sorbonne - Centre Maison des Sciences Economiques ( email )

106/112 boulevard de l'Hopital
Paris Cedex 13, 75647
France

CEPREMAP ( email )

Ecole Normale Superieure
48 boulevard Jourdan
75014 Paris
France

Pasquale Michael Sgro (Contact Author)

Deakin University - Department of Economics ( email )

70 Elgar rd
Burwood
Victoria 3125
03 9244 5245 (Fax)

Eden S. H. Yu

City University of Hong Kong - Department of Economics & Finance ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong

Chu Hai College of Higher Education ( email )

Yi Lok Street Rivera Gardens
Tsuen Wan
Hong Kong

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
383
Abstract Views
2,545
Rank
141,242
PlumX Metrics