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Dynamic efficiency in world economy

Author

Listed:
  • Kevin Luo

    (Graduate School of Economics, Kobe University)

  • Tomoko Kinugasa

    (Graduate School of Economics, Kobe University)

  • Kai Kajitani

    (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.

Suggested Citation

  • Kevin Luo & Tomoko Kinugasa & Kai Kajitani, 2018. "Dynamic efficiency in world economy," Discussion Papers 1801, Graduate School of Economics, Kobe University.
    • Handle: RePEc:koe:wpaper:1801
    as

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    File URL: http://www.econ.kobe-u.ac.jp/RePEc/koe/wpaper/2018/1801.pdf
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    References listed on IDEAS

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    Cited by:

    1. Kevin Luo & Tomoko Kinugasa, 2020. "Challenges for China’s economic development: the saving glut and policy implication," International Journal of Economic Policy Studies, Springer, vol. 14(1), pages 47-75, February.

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    More about this item

    Keywords

    Dynamic efficiency; Capital over-accumulation; Cash-flow criterion; Interest rates; Pareto optimality;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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