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Competitive General Equilibrium with Finite Change and Theory of Policy Making

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  • Hamid Beladi
  • Avik Chakrabarti
  • Sugata Marjit

Abstract

We construct a generalized model of finite change whereby exogenous shocks such as international trade or technological change, not only contract, but totally shut down production in some sectors. In such cases even in a competitive structure and in absolute contrast to the conventional wisdom, price based strategies to protect those vanishing sectors will not be equivalent to quantity based strategies. We also consider factor trade and a similar asymmetry between price based and quantity based interventionist policies.
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  • Hamid Beladi & Avik Chakrabarti & Sugata Marjit, 2016. "Competitive General Equilibrium with Finite Change and Theory of Policy Making," Economics and Politics, Wiley Blackwell, vol. 28(1), pages 1-7, March.
    • Handle: RePEc:bla:ecopol:v:28:y:2016:i:1:p:1-7
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    File URL: http://hdl.handle.net/10.1111/ecpo.12068
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    Cited by:

    1. Sugata Marjit & Kausik Gupta, 2023. "Inward‐looking policies, finite change, and employment: The capital reallocation effect," International Journal of Economic Theory, The International Society for Economic Theory, vol. 19(1), pages 62-76, March.
    2. Sugata Marjit & Kausik Gupta, 2020. "Inward Looking Policies, Finite Change and Employment - The Capital Reallocation Effect," CESifo Working Paper Series 8730, CESifo.
    3. Sugata Marjit & Suryaprakash Mishra & Sandip Sarkar & Lei Yang, 2019. "Trade, Inequality and Distribution-neutral Fiscal Policy," Foreign Trade Review, , vol. 54(2), pages 61-74, May.

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