Economic Efficiency And Growth: Evidence From Brazil, China, And India
Source: United Nations University
The authors compare economic efficiencies in Brazil, India, and China, where economic efficiency measures the gap between potential and actual output for a given input combination and technological factor. They use stochastic production frontier models to measure the contributions of factors of production and technology to growth and estimate non-positive error terms that capture production inefficiencies in each country. The results suggest that China and India had relatively inefficient production in the early 1980s but have since improved production efficiency substantially.