Blessing or Curse? The Rise of Tourism-Led Growth in Europe’s Southern Periphery

Reto Bürgisser and Donato Di Carlo
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Reto Bürgisser: University of Zurich
Donato Di Carlo: European University Institute

No qa8cd, SocArXiv from Center for Open Science

Abstract: Despite being one of the world's major internationally traded services, tourism remains neglected within debates on European integration and growth models. We highlight the rise of tourism-led growth in Southern Europe. We argue that the process of European integration has been a double-edged sword, simultaneously incentivizing and forcing Southern European economies to reap their comparative advantage in tourism. While European integration has created the preconditions for the expansion of intra-European tourism, monetary integration preempts macroeconomic management. Since the Eurozone crisis, internal devaluation and fiscal austerity have suppressed domestic growth drivers, inducing these governments towards an export-led growth strategy. We document the emergence of unprecedented tourism-related current account surpluses in Southern Europe, driven strongly by tourism imports from the EMU-core countries and the UK. Thus, while different types of export-led growth strategies now coexist in the EMU, Southern Europe’s excessive reliance on international tourism for growth comes with severe pitfalls.

Date: 2022-06-08
New Economics Papers: this item is included in nep-tur
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:qa8cd

DOI: 10.31219/osf.io/qa8cd

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