Tourism, money supply, and progressive inflation

Abstract

Context and background: The relation between money supply and inflation is not always clear in tourism economic systems, due to non-economic factors, and incomplete explanation such as by the Tourism Area Life Cycle, which gives no idea of how cycles are affected by or affect price. Motivation: This study is motivated by an idea that in real life prices do not rise or fall as per Marginal Utility Theory, but rise is lump-sums, hence to present a more realistic theory of money, inflation, and tourism. The hypothesis is that inflation is often due to weakness of currency but also monetary policy, in terms of reduced supply of smaller currency, cumulative effect of price rise of some commodities, rise in wages, and inelastic demand. The method used is to demonstrate the failed Product Life Cycle concept and present the modified quantum or denomination theory of money. The results, after analysing data from UK and world figures, show that inflation is progressive. A strategy based on the theory can help less well-off people in rural areas manage better, affordable tourism.

Keywords

• inflation
• currency
• wages
• profits
• destinations attractiveness
• Marx

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