Productivity and Welfare

Lilyan Fulginiti and Richard Perrin

No 2002/06, Efficiency Series Papers from University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG)

Abstract: Technical change is generally characterized by a rate and biases, both evaluated forgiven producer prices. This paper examines the potential discrepancy between this rate and the corresponding rate of consumer welfare change as measured by Allais distributable surplus. We postulate a general equilibrium context with various market failures (taxes, quotas, imperfect competition, and "poorly priced" commodities), and use comparative statics to express the rate of welfare change in terms of the rate and biases of the technical change. An elementary simulation model of a taxed economy suggests that the rate of welfare change may differ from the rate of technical change by as much as 50% under plausible circumstances.

Keywords: productivity; Allais surplus; general equilibrium (search for similar items in EconPapers)
Pages: 30
Date: 2002
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Journal Article: Productivity and Welfare (2005)
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