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Are All Technological Improvements Beneficial? Absolutely Not

Author

Listed:
  • Yochanan Shachmurove

    () (Department of Economicss and Business, The City College and Graduate Center of the City University of New York)

  • Uriel Spiegel

    () (Department of Management, Bar Ilan University and Department of Economics, University of Pennsylvania)

Abstract

This paper shows, using a simple model, that wasteful innovations may result in a loss-loss situation where no country experiences an increase in welfare. If some countries introduce innovations that result in harmful effects on other countries, it may cause the adversely affected countries to retaliate by imposing impediments to international trade. In a globalized and integrated World economy, such policies can only harm the countries involved. Thus, it is in both countries' best interest to encourage sustainable coordination between policies in order to better their own citizens, as well as the World's aggregate welfare.

Suggested Citation

  • Yochanan Shachmurove & Uriel Spiegel, 2013. "Are All Technological Improvements Beneficial? Absolutely Not," PIER Working Paper Archive 13-027, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  • Handle: RePEc:pen:papers:13-027
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    File URL: http://economics.sas.upenn.edu/system/files/13-027.pdf
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    References listed on IDEAS

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    1. Deepak Nayyar, 2006. "Globalisation, history and development: a tale of two centuries," Cambridge Journal of Economics, Oxford University Press, vol. 30(1), pages 137-159, January.
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    3. Lars Schwettmann, 2012. "Competing allocation principles: time for compromise?," Theory and Decision, Springer, vol. 73(3), pages 357-380, September.
    4. E.Kwan Choi & Hamid Beladi, 2006. "Factor Accumulation And The Terms Of Trade: Applications To The Asian Financial Crisis," Pacific Economic Review, Wiley Blackwell, vol. 11(3), pages 383-394, October.
    5. Jagdish N. Bhagwati, 1968. "Distortions and Immiserizing Growth: a Generalization," Review of Economic Studies, Oxford University Press, vol. 35(4), pages 481-485.
    6. Lipsey, Richard G. & Carlaw, Kenneth I. & Bekar, Clifford T., 2005. "Economic Transformations: General Purpose Technologies and Long-Term Economic Growth," OUP Catalogue, Oxford University Press, number 9780199290895.
    7. Andy Heughebaert & Sophie Manigart, 2012. "Firm Valuation in Venture Capital Financing Rounds: The Role of Investor Bargaining Power," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 39(3-4), pages 500-530, April.
    8. Holger Seebens & Johannes Sauer, 2007. "Bargaining power and efficiency-rural households in Ethiopia," Journal of International Development, John Wiley & Sons, Ltd., vol. 19(7), pages 895-918.
    9. Kutsoati, Edward & Zabojnik, Jan, 2005. "The effects of learning-by-doing on product innovation by a durable good monopolist," International Journal of Industrial Organization, Elsevier, vol. 23(1-2), pages 83-108, February.
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    More about this item

    Keywords

    International Trade; Samuelson; Gainers and Losers from Trade; Technological Improvements; Concealed Technological Improvements; Pareto Improvements in Production and Consumption; Nash Bargaining Process; Sleeping Patents; Rest of the World; Terms of Trade; Distributive Justice; China; United States.;

    JEL classification:

    • F0 - International Economics - - General
    • F1 - International Economics - - Trade
    • O - Economic Development, Innovation, Technological Change, and Growth
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies

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