No |
SDES-2023-4 |
Title |
The general equilibrium effects of localised technological
progress: A Classical approach |
Author |
Naoki Yoshihara and Roberto Veneziani |
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. |
Revised version published in |
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