Are All Technological Improvements Beneficial? Absolutely Not

Yochanan Shachmurove and Uriel Spiegel ()
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Uriel Spiegel: Department of Management, Bar Ilan University and Department of Economics, University of Pennsylvania

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: This paper shows, using a simple model, that wasteful innovations may result in a loss-loss situation where no country experiences an increase in welfare. If some countries introduce innovations that result in harmful effects on other countries, it may cause the adversely affected countries to retaliate by imposing impediments to international trade. In a globalized and integrated World economy, such policies can only harm the countries involved. Thus, it is in both countries' best interest to encourage sustainable coordination between policies in order to better their own citizens, as well as the World's aggregate welfare.

Keywords: International Trade; Samuelson; Gainers and Losers from Trade; Technological Improvements; Concealed Technological Improvements; Pareto Improvements in Production and Consumption; Nash Bargaining Process; Sleeping Patents; Rest of the World; Terms of Trade; Distributive Justice; China; United States. (search for similar items in EconPapers)
JEL-codes: D51 F0 F1 O O1 O3 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2013-06-19
New Economics Papers: this item is included in nep-ipr and nep-pr~
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