The paper analyses the implications of tourism activities for economic growth and environmental assets, focusing especially on small island countries. The author develops a stylized dynamic economic model in which tourism is the trigger of the incentive mechanism leading to abatement activities and economic growth. The basic idea is that tourists choose the location to visit according to a number of factors (including environmental quality) which are affected by residents' choices. If residents engage in environmental protection activities, it then may be possible for environmentally based tourism economies to reach a smooth development process. The author shows that the (sustainable) balanced growth path is the only viable equilibrium, and along such a path consumption grows while environmental quality rises. Tourists' preferences crucially affect the long-run outcome, since economic and environmental growth rates increase with the green preference and decrease with the grey preference and crowding aversion parameters. Thus, if tourism specialization is to be the pathway to development, green tourism will need to be promoted.

Tourism specialization on the one hand may be a successful tool to achieve fast economic growth, and, on the other hand, may be detrimental for natural resources. Finding the right balance between economic benefits and environmental costs is essential to reach sustainable development, ensuring that tourist numbers do not exceed the carrying capacity of the tourism destination. In this context, the author analyses the determination of the optimal number of visitors in a tourism-based economy and shows that if the tourist number is optimally determined long-run sustainable growth will be possible. He also shows that the optimal number of tourists is strictly smaller than the carrying capacity of the tourism destination, and that such a condition is vital to achieve long-run growth.

The COVID‐19 pandemic is still ravaging the planet, but its (short‐, medium‐, and long‐term) diverse effects on health, economy, and society are far from being understood. This article investigates the potential impact of a deadly epidemic and its main nonpharmaceutical control interventions (social distancing vs. testing–tracing–isolation, TTI) on capital accumulation and economic development at different time scales. This is done by integrating an epidemiological susceptible–infectious–recovered model with a Solow‐type growth model including public expenditure, as a parsimonious setting to offer insights on the trade‐off between protecting human lives and the economy and society. The work clarifies (i) the long‐term interactions amongst a deadly infection, demography, and capital accumulation, (ii) the lack of viability of persistent social distancing measures also using an analytical characterization, and the threat of policy‐enhanced COVID‐19 endemicity, (iii) the potentially high return on investments in TTI activities to avoid future lockdowns and related capital disruption. It also quantifies the welfare effects of a range of policies, confirming a counterintuitive role for tax‐funded preventive investments aimed at strengthening TTI as more desirable interventions than generalized lockdowns.