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

Naoki Yoshihara () and Roberto Veneziani

No SDES-2023-4, Working Papers from Kochi University of Technology, School of Economics and Management

Abstract: We study the general equilibrium effects of localised technical progress `a 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)
JEL-codes: D33 D51 O33 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2023-05, Revised 2023-05
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Published in SDE Series, May 2023, pages 1-43

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http://www.souken.kochi-tech.ac.jp/seido/wp/SDES-2023-4.pdf First version, 2023 (application/pdf)

Related works:
Journal Article: 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:kch:wpaper:sdes-2023-4

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