NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Assessing Dynamic Efficiency: Theory and Evidence

Andrew B. Abel, N. Gregory Mankiw, Lawrence H. Summers, Richard J. Zeckhauser

NBER Working Paper No. 2097 (Also Reprint No. r1168)
Issued in December 1986
NBER Program(s):   EFG   PR

The issue of dynamic efficiency is central to analyses of capital accumulation and economic growth. Yet the question of what operating characteristics of an economy subject to productivity shocks should be examined to determine whether or not it is efficient has not been resolved. This paper develops criterion based on observables for determining whether or not an economy is dynamically efficient. The criterion involves a comparison of the cash flows generated by capital with the volume of investment. Its application to the United States economy and the economies of other major OECD nations suggests that they are dynamically efficient.

download in pdf format
   (316 K)

download in djvu format
   (223 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w2097

Published: Review of Economic Studies, Vol. 56, No. 1, pp. 1-20, (January 1989). citation courtesy of

 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us