COVID-19 has led to an unprecedented disruption in tourism spending. This has propagated through the whole economy, however the scale of these system-wide consequences can be hard to quantify. We calculate direct reductions in spending across domestic and inbound tourism categories and then use...

This paper uses a micro-founded DSGE model to compare second-best optimal environmental policy and the resulting allocation to first-best allocation. The focus is on the source and size of uncertainty, and how this affects optimal choices and the inferiority of second best vis-à-vis first best.