Dynamic Efficiency Redux: Evidence from China

Feng Dong, Jinpu Li, Haoning Sun and Siqing Wang

China & World Economy, 2025, vol. 33, issue 5, 196-222

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

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:bla:chinae:v:33:y:2025:i:5:p:196-222

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