A Harrodian Model that fits the Tourism-led Growth Hypothesis for Tourism-based Economies

Authors

  • José Pérez-Montiel Department of Applied Economics, Faculty of Economics and Business Sciences, University of the Balearic Islands, E-mail: jose.perez@uib.es
  • Oscar Dejuán Asenjo Department of Economic Analysis and Finance, Faculty of Economics and Business Sciences, University of Castilla–La Mancha, E-mail: oscar.dejuan@uclm.es
  • Carles Manera Erbina Department of Applied Economics, Faculty of Economics and Business Sciences, University of the Balearic Islands, E-mail: carles.manera@uib.es

Keywords:

Tourism-led growth hypothesis; demand-led growth model; autonomous demand, Tourism-based Economies

Abstract

The tourism-led growth hypothesis (TLGH) has been the subject of hundreds of investigations. However, most of these investigations have limited themselves to empirically verify a dynamic relationship between tourism receipts and economic activity, leaving aside the theoretical background or the baseline economic growth model on which the TLGH could be built. With this in mind, the authors present a multiplier-accelerator growth model and state that it is a good option to analyze the TLGH. This model fits the TLGH, since its long-run equilibrium positions are analogous to the TLGH. However, multiplier-accelerator growth models generally suffer from dynamic instability. Therefore, the authors propose a model with an investment function that, by relating the acceleration of investment just to the “permanent” increases in demand, is able to replicate the “relative stability” of growth of tourism-based economies.

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Published

2021-03-01

How to Cite

Pérez-Montiel, J., Asenjo, O., & Erbina, C. . (2021). A Harrodian Model that fits the Tourism-led Growth Hypothesis for Tourism-based Economies. European Journal of Tourism Research, 27, 2706. Retrieved from https://ejtr.vumk.eu/index.php/about/article/view/2126