Munich Personal RePEc Archive

Stationary Growth and the Impossibility of Capital Efficiency Gains

Li, Defu and Bental, Benjamin and Huang, Jiuli (2016): Stationary Growth and the Impossibility of Capital Efficiency Gains.

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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.

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