The Impact of Technological Change on a Competitive Industry

Abstract

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 un-known functional forms. The comparative statics analysis solves for changes in equi-librium market prices and quantities as functions of parameters that characterize tech-nological 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 post. Key words: comparative statics, competitive industry, technological chang

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oai:CiteSeerX.psu:10.1.1.906.9326Last time updated on 11/1/2017

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