CONFLICT GENERATING PRODUCT PRICE CHANGES - THE IMPUTED OUTPUT APPROACH

A novel approach to the generalisation of the conflict generating effe cts of product price changes on household incomes and utilities is dev eloped. It is based upon the concepts of household production of goods and complementarities in production between households. Economy outpu ts are imputed to households. The imputed household outputs may be pos itive or negative. Households have an incentive to supply factors to f irms if and only if at least one imputed output is negative. It is sho wn that households which are complementary in production are competiti ve in distribution. The results are generalised to economies with incr easing returns to scale industries.