Shadow Prices for Project Evaluation Under Alternative Macroeconomic Specifications

S-Tier
Journal: Quarterly Journal of Economics
Year: 1983
Volume: 98
Issue: 3
Pages: 457-477

Authors (2)

Clive Bell (Ruprecht-Karls-Universität, Sü...) Shantayanan Devarajan (not in RePEc)

Score contribution per author:

4.022 = (α=2.01 / 2 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper takes the view that a project is a disturbance to an economy in equilibrium, and examines the shadow prices for project evaluation under alternative assumptions about how equilibrium is restored. When the government reacts by altering its foreign exchange reservesâ€â€a nondistortionary adjustment mechanismâ€â€the shadow prices coincide with those advocated in the manuals on social cost-benefit analysis. However, if the government adjusts its domestic expenditures or tariff rates, the shadow prices will differ from those of the manuals, except insofar as the relative shadow prices of tradeables remain their relative border prices.

Technical Details

RePEc Handle
repec:oup:qjecon:v:98:y:1983:i:3:p:457-477.
Journal Field
General
Author Count
2
Added to Database
2026-01-24