Is tourism growth able to shrink economic inequalities? A DSGE analysis

Bibliographic Data

ID13136357
AuthorsHongru Zhang (0009-0004-8377-4155, Macau University of Science and Technology, corresponding author), Yang Yang (0000-0002-3705-7612, Temple University)
Year2023
Volume4
Issue1
Pages100089-100089
Publication date2023-02-21
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueAnnals of Tourism Research Empirical Insights (JOURNAL)
Journal identifiersISSN: 2666-9579 • E-ISSN: 2666-9579
PublisherElsevier BV (PUBLISHER)
DOI10.1016/j.annale.2023.100089
OpenAlexW4321465938
LanguageEN
Citations received11
References cited57

The aim of this paper is to investigate the relationship between inbound tourism and economic inequalities (income and wealth). We construct a dynamic stochastic general equilibrium (DSGE) small open-economy model that includes the tourism industry and the housing market. We focus on the recent Icelandic tourism boom, and our simulation results suggest a reduction in income inequality and an increase in wealth inequality. Inbound tourism thus has opposite effects on domestic income inequality and wealth inequality, so the Icelandic government faces a trade-off when formulating tourism-related policies to reduce inequalities, and the consequences may depend on the type of inequality that policymakers prioritize. Lastly, implications are provided based on results

Boom · Construct (python library · Dynamic stochastic general equilibrium · Economic inequality · Economics · Geography · Government (linguistics · Icelandic · Income inequality metrics · Inequality · Labour economics · Macroeconomics · Monetary policy · Small open economy · Tourism · Diverse Aspects of Tourism Research · Economic theories and models · Economic Theory and Institutions

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