The Dynamics of Tourism's Economic Impact

Abstract

When considering the economic impact of tourism, it is common to model tourism expenditures in a static model, providing the impact that tourism spending would have if its effects were contained in a single year. This confuses two features; first, that any change in tourism spending has a time dimension and, second, it ignores changes that may occur in years after the change in spending has taken place, or that occur prior to it if the spending is anticipated. This paper uses a dynamic CGE model to examine these effects, providing comparisons between anticipated and unanticipated tourism booms.