Fiche du document
2008
- handle: 10670/1.7ea68o
- halshs: halshs-00645307
Mots-clés
Tourism Optimal tariffs Optimal investment taxesSujets proches
Tourist traffic Tourism--Economic aspects Tourist trade Tourist industry Holiday industry Tourism industry Operators, Tour (Industry) Tourism operators (Industry) Tour operators (Industry) Visitor industry Travel industryCiter ce document
Jean-Pierre Laffargue et al., « Is free trade optimal for a small economy with tourism? », HAL-SHS : économie et finance, ID : 10670/1.7ea68o
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Résumé
We explore the welfare effects of tariffs and investment taxes for a small open economy in the presence of tourism. Inbound tourism converts local nontraded goods into tradable, generating a tourism terms-of-trade effect. Because of this favourable "expenditure-shifting" effect when goods are substitutes, increases in import tariffs and investment taxes can actually improve welfare of domestic residents. We establish that for a small open economy with tourism, free trade is not the first-best policy. The optimal rates of tariffs and investment taxes are then derived and simulated for the economy with tourism.