Harberger versus Marshall. Approximating general equilibrium welfare changes

V. Kerry Smith

Research output: Contribution to journalArticle


This paper illustrates how computable general equilibrium models can be used to evaluate the limits of partial equilibrium analysis. The example used for the analysis involves welfare measurement for economy-wide exogenous shocks. Comparison of Harberger's general equilibrium approximation to consumer surplus and the Marshallian partial equilibrium measures indicates that there are cases where the latter offers a reasonably accurate measure of welfare change in a general equilibrium setting.

Original languageEnglish (US)
Pages (from-to)123-126
Number of pages4
JournalEconomics Letters
Issue number2
StatePublished - 1987


ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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