Stationary Growth and the Impossibility of Capital Efficiency Gains

Defu Li (), Benjamin Bental and Jiuli Huang

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Neoclassical Growth Model; Uzawa’s Theorem; Improving Efficiency; Technical Change; Stationary Growth Path (search for similar items in EconPapers)
JEL-codes: E13 O30 O41 (search for similar items in EconPapers)
Date: 2016-05-21
New Economics Papers: this item is included in nep-eff, nep-fdg and nep-gro
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:71516

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