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Stationary Growth and the Impossibility of Capital Efficiency Gains

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  • Li, Defu
  • Bental, Benjamin
  • Huang, Jiuli

Abstract

Improving the efficiency either in the process of factor accumulation or in the process of production of final output is often considered as a main driving force for the sustainable growth of modern economies. However, this article proves that for the most important input, physical capital, total efficiency, i.e. the total efficiency gained in the process of accumulation and in the production process, must be zero along a stationary growth path.

Suggested Citation

  • Li, Defu & Bental, Benjamin & Huang, Jiuli, 2016. "Stationary Growth and the Impossibility of Capital Efficiency Gains," MPRA Paper 71516, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:71516
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Neoclassical Growth Model; Uzawa’s Theorem; Improving Efficiency; Technical Change; Stationary Growth Path;
    All these keywords.

    JEL classification:

    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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