Specialisation versus diversification: A simple model for tourist cities

摘要

By developing a simple general equilibrium structure, this paper compares the welfare effects of tourism specialisation and economic diversification in tourist cities. We discovered that tourist cities with limited carrying capacity easily suffer from side effects, particularly Dutch disease, when faced with rapid tourism growth. Therefore, such cities should actively use revenue that is generated from the booming tourism sector to pursue economic diversification for the sake of sustainable urban development.