The general equilibrium effects of localised technological progress: A Classical approach

Naoki Yoshihara () and Roberto Veneziani

Journal of Mathematical Economics, 2023, vol. 109, issue C

Abstract: We study the general equilibrium effects of localised technical progress à la Atkinson–Stiglitz in economies in which capital is a vector of reproducible and heterogeneous goods. We show that there is no obvious relation between ex-ante profitable innovations and the functional distribution of income that actually emerges in equilibrium. Unlike in the standard macroeconomic approach to technical progress, localised innovations may lead to indeterminacy in equilibrium factor prices, and individually rational choices of technique do not necessarily lead to optimal outcomes. Innovations may even cause the disappearance of all equilibria.

Keywords: Localised technical progress; Income distribution; General equilibrium (search for similar items in EconPapers)
Date: 2023
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Working Paper: The general equilibrium effects of localised technological progress: A Classical approach (2023)
Working Paper: The general equilibrium effects of localised technological progress: A Classical approach (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:109:y:2023:i:c:s0304406823000976

DOI: 10.1016/j.jmateco.2023.102904

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