Dynamic efficiency in world economy

Kevin Luo (), Tomoko Kinugasa () and Kai Kajitani ()
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Kevin Luo: Graduate School of Economics, Kobe University
Tomoko Kinugasa: Graduate School of Economics, Kobe University
Kai Kajitani: Graduate School of Economics, Kobe University

No 1801, Discussion Papers from Graduate School of Economics, Kobe University

Abstract: This study re-estimates dynamic efficiency based on the AMSZ (1989) criterion by exploiting the largest dataset assembled to date. It reveals that major economies conform to a similar "U-shaped curve" in their evolution of capital accumulation; that is, a period of decreasing efficiency followed by one of increasing efficiency. It also indicates that nations are not necessarily dynamically efficient if statistical bias is considered. As a prime example, China today is unquestionably in a serious state of dynamic inefficiency. The study discusses the theoretical limitations of AMSZ (1989), and calls for new breakthroughs in efficiency criteria.

Keywords: Dynamic efficiency; Capital over-accumulation; Cash-flow criterion; Interest rates; Pareto optimality (search for similar items in EconPapers)
JEL-codes: E22 E43 O57 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2018-01
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (1)

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