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Price-induced technical progress and comparative statics

Author

Listed:
  • Quirino Paris

    (University of California, Davis)

  • Michael R. Caputo

    (University of California, Davis)

Abstract

The conjecture of a price-induced technical progress was formulated by Hicks in 1932. It acquired prominence during the seventies with the work of Hayami and Ruttan who dealt with the agricultural sectors in the United States and Japan. A novel specification of this hypothesis is that output and input prices enter the production function as shift parameters of the technology frontier. In this paper, it is found that empirically verifiable hypotheses under price-induced technical progress can be expressed in the form of estimable combinations of partial derivatives of the input demand functions with the partial derivatives of the production function. In principle, these novel comparative statics relations are observable but their measurement requires the simultaneous estimation of the input demand and of the production functions. The price-induced technical progress specification presented in this paper includes a generalization of the Hotelling lemma.

Suggested Citation

  • Quirino Paris & Michael R. Caputo, 2001. "Price-induced technical progress and comparative statics," Economics Bulletin, AccessEcon, vol. 15(8), pages 1-8.
    • Handle: RePEc:ebl:ecbull:eb-01o30003
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    References listed on IDEAS

    as
    1. Silberberg, Eugene, 1974. "A revision of comparative statics methodology in economics, or, how to do comparative statics on the back of an envelope," Journal of Economic Theory, Elsevier, vol. 7(2), pages 159-172, February.
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    Cited by:

    1. Kumar, Surender & Managi, Shunsuke, 2010. "Sulfur dioxide allowances: Trading and technological progress," Ecological Economics, Elsevier, vol. 69(3), pages 623-631, January.
    2. Esposti, Roberto & Pierani, Pierpaolo, 2008. "Price-induced technical progress in Italian agriculture," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 89(4).
    3. Caputo, Michael R. & Paris, Quirino, 2013. "An intertemporal microeconomic theory of disembodied and price-induced technical progress," Economic Modelling, Elsevier, vol. 33(C), pages 631-640.
    4. Michael Caputo & Quirino Paris, 2005. "An Atemporal Microeconomic Theory and an Empirical Test of Price-Induced Technical Progress," Journal of Productivity Analysis, Springer, vol. 24(3), pages 259-281, November.
    5. Quirino Paris, 2008. "Price-induced technical progress in 80 years of US agriculture," Journal of Productivity Analysis, Springer, vol. 30(1), pages 29-51, August.

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    More about this item

    Keywords

    comparative statics;

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • D2 - Microeconomics - - Production and Organizations

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