Does dynamic market competition with technological innovation leave no one behind?: Examinations of Hicksian optimism in OLG frameworks

Yongsheng Xu and Naoki Yoshihara

No 500, TERG Discussion Papers from Graduate School of Economics and Management, Tohoku University

Abstract: In a simple Overlapping Generations model, we define ‘improvements’ due to technological progress in the economy and introduce and study the notion of Hicksian optimism, which captures the idea that no one, in the ‘long-run’, is left behind due to such improvements in the economy, and show that the market mechanism with technological progress unavoidably leaves some individuals behind and cannot deliver the Hicksian optimism. This negative result holds for a broader class of intertemporal resource allocation mechanisms.

Pages: 24 pages
Date: 2026-09-19
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https://doi.org/10.50974/0002008562

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Persistent link: https://EconPapers.repec.org/RePEc:toh:tergaa:500

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