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Full-Text Articles in Social and Behavioral Sciences
The Impact Of Technological Change On A Competitive Industry, Richard K. Perrin
The Impact Of Technological Change On A Competitive Industry, Richard K. Perrin
Richard K Perrin
This study analytically evaluates the impact of technological change on output and input markets in a competitive industry of identical firms. Firm-level technology and technological change are represented parametrically as local approximations to unknown functional forms. The comparative statics analysis solves for changes in equilibrium market prices and quantities as functions of parameters that characterize technological change. The technology-induced shift in industry supply is shown to equal the rate of technological change plus the share-weighted induced change in input prices. The model provides a consistent and systematic framework for evaluating the impact of technological change, either ex ante or ex …
Cycles In Nonrenewable Resource Prices With Pollution And Learning-By-Doing, Ujjayant N. Chakravorty, Andrew Leach, Michel Moreaux
Cycles In Nonrenewable Resource Prices With Pollution And Learning-By-Doing, Ujjayant N. Chakravorty, Andrew Leach, Michel Moreaux
Ujjayant Chakravorty
We study how environmental regulation in the form of a cap on aggregate emissions from a fossil fuel (e.g., coal) interacts with the arrival of a clean substitute (e.g., solar energy). The cost of the substitute is assumed to decrease with cumulative use because of learning-by-doing. We show that optimal energy prices may initially increase because of pollution regulation, but fall due to learning, and rise again because of scarcity of the resource, finally falling after transition to the clean substitute. Thus nonrenewable resource prices may exhibit cyclical behavior even in a purely deterministic setting.