General Equilibrium Impacts of Technological Change under.pdfVIP

General Equilibrium Impacts of Technological Change under Different Market Structures: A Comparison of Supply Managed and Other Primary Agricultural Markets in Canada * Pahan Prasada ABSTRACT Market impacts of technological change in Canadian agriculture are measured within a CGE framework using 2001 input-output data with agriculture disaggregated to six sectors and thirteen commodities. Technological change is modelled as productivity rises in the use of intermediate inputs and of primary factors. Impacts on output, intermediate use of output, foreign trade, final consumption, returns to primary factors and relative price are calculated for primary and processed food products. Impacts of technological change can be summarised into two general outcomes. First, supply managed sectors respond to technological change differently than other agricultural sectors. In the former, economic rents generated from quotas increase while in the latter, outputs, exports, and final consumption increase along with declines of relative supply prices. Second, large relative price declines for other commodities lead to consumer gains. Introduction Economic assessments of impacts of new technologies can use several approaches. Many studies have used the partial-equilibrium model of Alston et al., (1995) which examines market consequences of new technologies and calculates changes in producer and consumer welfare. Partial equilibrium multi-stage production models after Martin and Alston (1994) have also been used in number of occasions to capture the impa