Partial-Equilibrium Welfare Analysis.
The use of partial equilibrium models is common, and, typically, efficiency is characterized by maximizing consumer plus producer surplus (or, sometimes, gross consumer surplus). The analysis appeals-implicitly or explicitly-to the concept of efficiency derived from general equilibrium models. Using the tax-reform methodology, it is shown in a simple general equilibrium model that, if the second-best outcome is not the first-best one, the sum of consumer plus producer surplus cannot lead an economy to its true second-best optimum. Copyright 1999 by Blackwell Publishing Inc.
Year of publication: |
1999
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Authors: | Blackorby, Charles |
Published in: |
Journal of Public Economic Theory. - Association for Public Economic Theory - APET, ISSN 1097-3923. - Vol. 1.1999, 3, p. 359-74
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Publisher: |
Association for Public Economic Theory - APET |
Saved in:
freely available
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