Tracking prices over time is easy when the object in question doesn't change much-say, an orange. But the process is difficult when there are frequent changes in the quality of the item-say, an Apple computer. Hedonics provides the solution.

This paper considers transition dynamics associated with a change in the rate of technological progress, using a general equilibrium framework that incorporates stochastic technology growth trends. The model suggests that these dynamics are associated with protracted transition periods,...