Dynamic Inefficiency

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August 31, 2024 5 min read Definitions
Dynamic Inefficiency: Understanding Resource Allocation Over Time
Economics Finance Dynamic Inefficiency Intertemporal Economy Pareto Improvement Capital Accumulation Consumption Allocation
Dynamic inefficiency occurs when an intertemporal economy allows for reallocation of resources to achieve Pareto improvement, indicating excessive saving and capital accumulation with incorrect allocation of consumption across time.
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