TOURISM, TRADE, EXTERNALITIES, AND PUBLIC GOODS IN A THREE-SECTOR GROWTH MODEL
The purpose of this study is to introduce tourism, externalities, and public goods to a small-open growth with endogenous wealth and public goods supply. We develop the model on the basis of the Solow-Uzawa growth model, the neoclassical neoclassical growth theory with externalities, and ideas from tourism economics. The economy consists of three – service, industrial, and public - sectors. The production side is based on the traditional growth theories, while the household behavior is described by an alternative utility function proposed by Zhang.