TOURISM, TRADE AND WEALTH ACCUMULATION WITH ENDOGENOUS INCOME AND WEALTH DISTRIBUTION AMONG COUNTRIES

The purpose of this study is to study dynamic interactions among economic growth, structural change, international trade and tourist flows. It builds a multi-country growth model with endogenous wealth accumulation and tourism. The model is unique in that it introduces endogenous tourism within a general dynamic equilibrium framework. The model is built on microeconomic foundations. It not only integrates the three well-known Solow growth model, Oniki-Uzawa trade model, and the Uzawa two-sector model, but also introduces tourist flows between economies for any number of national economies. After building the model, we demonstrate that the motion of the J - country world economy can be described by J differential equations. We also simulate the global economy with three countries, showing that the world dynamics has a unique equilibrium. We carry out comparative dynamic analysis with regard to one country's total productivity factor, the propensity to save, the propensity to tour other countries, and the population.