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Dynamic Efficiency Redux: Evidence from China

Author

Listed:
  • Feng Dong
  • Jinpu Li
  • Haoning Sun
  • Siqing Wang

Abstract

Dynamic efficiency is an important concept in the analysis of consumption, asset pricing, and fiscal policies. Using an illustrative overlapping generations model, this study shows that when the interest rate is lower than the growth rate, active fiscal policy can increase both consumption and efficiency. It provides an integrated analysis using different interest rate metrics, comparing the risk‐free rate rf, returns on assets re, and returns on capital rk with the growth rate g. The findings indicate that, in general, rf

Suggested Citation

  • Feng Dong & Jinpu Li & Haoning Sun & Siqing Wang, 2025. "Dynamic Efficiency Redux: Evidence from China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 33(5), pages 196-222, September.
    • Handle: RePEc:bla:chinae:v:33:y:2025:i:5:p:196-222
    DOI: 10.1111/cwe.12611
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