| 来源类型 | Working Paper
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| 规范类型 | 报告
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| DOI | 10.3386/w28754
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| 来源ID | Working Paper 28754
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| Welfare and Output with Income Effects and Taste Shocks |
| David Baqaee; Ariel Burstein
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| 发表日期 | 2021-05-10
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| 出版年 | 2021
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| 语种 | 英语
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| 摘要 | We present a unified treatment of how welfare responds to changes in budget sets or technologies with taste shocks and non-homothetic preferences. We propose a welfare metric that ranks production possibility frontiers that differs from one that ranks budget sets, and characterize it using a general equilibrium generalization of Hicksian demand. This extends Hulten’s theorem, the basis for constructing aggregate quantity indices, to environments with non-homothetic and unstable preferences. We illustrate our results using both long- and short-run applications. In the long run, we show that if structural transformation is caused by income effects or changes in tastes, rather than substitution effects, then Baumol’s cost disease is twice as important for our preferred measure of welfare. In the short run, we show that standard chain-weighted deflators understate welfare-relevant inflation for current tastes. Finally, using the Covid-19 recession we illustrate that chain-weighted real consumption and real GDP are unreliable metrics for measuring welfare or production when there are taste shocks. |
| 主题 | Macroeconomics
; Macroeconomic Models
; Consumption and Investment
; Business Cycles
; COVID-19
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| URL | https://www.nber.org/papers/w28754
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| 来源智库 | National Bureau of Economic Research (United States)
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| 引用统计 |
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| 资源类型 | 智库出版物
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| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/586428
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推荐引用方式
GB/T 7714 |
David Baqaee,Ariel Burstein. Welfare and Output with Income Effects and Taste Shocks. 2021.
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文件名：
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w28754.pdf
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格式：
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Adobe PDF
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