Keynesian policies for tourism: taxation without coordination

In this paper the authors investigate the effect of a Keynesian policy in tourism destinations where tourism products are mainly sold through ‘direct sales’ (decentralized solution) and the tourism market equilibrium is characterized by sticky prices and unemployment (coordination failure); thus the conditions for a Keynesian demand policy are verified. This policy is a Pareto improving solution with respect to the organization of sales by tour operators or destination managers (centralized solution), since tourism firms are not worseoff in terms of profits and there is an increase of tourism production as well as of employment.