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The Welfare Significance and Non-significance of General Equilibrium Demand and Supply Curves

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  • Thurman, Walter N.

Abstract

General equilibrium demand and supply curves can be used to measure the multiple market effects of interventions m a single market. However, complications arise when feedback into the mtervened-m market comes through both demand and supply channels. This article presents a new and straightforward proof of the significance of general equilibrium curves when there is only one source of feedback, establishes the conditions under which multiple sources of feedback invalidate the analysis, and demonstrates that the general equilibrium curves become policy dependent when there are multiple sources of feedback.
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  • Thurman, Walter N., 1990. "The Welfare Significance and Non-significance of General Equilibrium Demand and Supply Curves," 1990 Annual meeting, August 5-8, Vancouver, Canada 270728, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea90:270728
    DOI: 10.22004/ag.econ.270728
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    References listed on IDEAS

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    1. Walter N. Thurman & Michael K. Wohlgenant, 1989. "Consistent Estimation of General Equilibrium Welfare Effects," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(4), pages 1041-1045.
    2. Anderson, James E, 1976. "The Social Cost of Input Distortions: A Comment and a Generalization," American Economic Review, American Economic Association, vol. 66(1), pages 235-238, March.
    3. Panzar, John C & Willig, Robert D, 1978. "On the Comparative Statics of a Competitive Industry with Inframarginal Firms," American Economic Review, American Economic Association, vol. 68(3), pages 474-478, June.
    4. Carlton, Dennis W, 1979. "Valuing Market Benefits and Costs in Related Output and Input Markets," American Economic Review, American Economic Association, vol. 69(4), pages 688-696, September.
    5. Just, Richard E & Hueth, Darrell L, 1979. "Welfare Measures in a Multimarket Framework," American Economic Review, American Economic Association, vol. 69(5), pages 947-954, December.
    6. Rucker, Randal R & Thurman, Walter N, 1990. "The Economic Effects of Supply Controls: The Simple Analytics of the U.S. Peanut Program," Journal of Law and Economics, University of Chicago Press, vol. 33(2), pages 483-515, October.
    7. Harberger, Arnold C, 1971. "Three Basic Postulates for Applied Welfare Economics: An Interpretive Essay," Journal of Economic Literature, American Economic Association, vol. 9(3), pages 785-797, September.
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    Cited by:

    1. Giancarlo Moschini & Harvey Lapan, 1997. "Intellectual Property Rights and the Welfare Effects of Agricultural R&D," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1229-1242.
    2. Alston, Julian M., 1991. "Research Benefits in a Multimarket Setting: A Review," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 59(01), pages 1-30, April.
    3. Bullock, David S. & Salhofer, Klaus, 2003. "Judging agricultural policies: a survey," Agricultural Economics, Blackwell, vol. 28(3), pages 225-243, May.
    4. Mullen, John D. & Alston, Julian M., 1995. "The Impact on the Australian Lamb Industry of Producing Larger Leaner Lamb," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 62(01), pages 1-19, April.
    5. David S. Bullock & Klaus Salhofer & Jukka Kola, 1999. "The Normative Analysis of Agricultural Policy: A General Framework and Review," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(3), pages 512-535, September.

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