Harberger versus Marshall. Approximating general equilibrium welfare changes

V. Kerry Smith

Research output: Contribution to journalArticle

Abstract

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
Volume25
Issue number2
DOIs
StatePublished - 1987
Externally publishedYes

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Partial equilibrium
General equilibrium
Consumer surplus
Equilibrium analysis
Exogenous shocks
Welfare measurement
Computable general equilibrium model
Approximation

ASJC Scopus subject areas

  • Economics and Econometrics
  • Finance

Cite this

Harberger versus Marshall. Approximating general equilibrium welfare changes. / Smith, V. Kerry.

In: Economics Letters, Vol. 25, No. 2, 1987, p. 123-126.

Research output: Contribution to journalArticle

Smith, V. Kerry. / Harberger versus Marshall. Approximating general equilibrium welfare changes. In: Economics Letters. 1987 ; Vol. 25, No. 2. pp. 123-126.
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