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

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  • Yoshihara, Naoki
  • Veneziani, Roberto

Abstract

We study the general equilibrium effects of localised technical progress à la Atkinson-Stiglitz on income distribution 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 income distribution that actually emerges in equilibrium. Unlike in the standard macroeconomic literature, localised technical progress 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.

Suggested Citation

  • Yoshihara, Naoki & Veneziani, Roberto, 2022. "The general equilibrium effects of localised technological progress : A Classical approach," Discussion Paper Series 735, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:hituec:735
    Note: September 15, 2022
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    More about this item

    Keywords

    localised technical progress; income distribution; equilibrium framework;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies

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