TY - JOUR
T1 - Technological change and welfare in an open economy with distortions
AU - Perrin, Richard K.
AU - Fulginiti, Lilyan E.
N1 - Funding Information:
This research was supported in part by the Agricultural Research Service of the University of Nebraska, Journal Series No. 13224. We acknowledge helpful comments by two anonymous reviewers and a number of workshop participants.
PY - 2001/5
Y1 - 2001/5
N2 - Traditional measures of technological change, such as the rate of technical change, are based on producer-oriented prices. Here, we employ a general equilibrium analysis of an open economy to examine how the consumer welfare gain from a technological change, measured as Hicksian equivalent variation, is related to the rate of technical change, the biases of the technological change, and tax distortions in the economy. An analytical solution shows these relationships in a readily computable framework, and demonstrates that the rate of technical change will equal the rate of welfare change in only very unrealistic cases.
AB - Traditional measures of technological change, such as the rate of technical change, are based on producer-oriented prices. Here, we employ a general equilibrium analysis of an open economy to examine how the consumer welfare gain from a technological change, measured as Hicksian equivalent variation, is related to the rate of technical change, the biases of the technological change, and tax distortions in the economy. An analytical solution shows these relationships in a readily computable framework, and demonstrates that the rate of technical change will equal the rate of welfare change in only very unrealistic cases.
KW - Distortions
KW - Equivalent variation
KW - General equilibrium
KW - Technological change
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U2 - 10.1111/0002-9092.00169
DO - 10.1111/0002-9092.00169
M3 - Article
AN - SCOPUS:0034996881
SN - 0002-9092
VL - 83
SP - 455
EP - 464
JO - American Journal of Agricultural Economics
JF - American Journal of Agricultural Economics
IS - 2
ER -