economic efficiency

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Market Efficiency

The extent to which the price of an asset reflects all information available. Economists disagree on how efficient markets are. Followers of the efficient markets theory hold that the market efficiently deals with all information on a given security and reflects it in the price immediately, and that technical analysis, fundamental analysis, and/or any speculative investing based on those methods are useless. On the other hand, the primary observation of behavioral economics holds that investors (and people in general) make decisions on imprecise impressions and beliefs, rather than rational analysis, rendering markets somewhat inefficient to the extent that they are affected by people.

economic efficiency

an aspect of PRODUCTION that seeks to identify, for a given level of OUTPUT, the combination of FACTOR INPUTS that minimizes the COST of producing that output. More broadly, economic efficiency is equated with the effectiveness of RESOURCE ALLOCATION in the economy as a whole such that outputs of goods and services fully reflect consumer preferences for these goods and services as well as individual goods and services being produced at minimum cost through appropriate mixes of factor inputs.

See EFFICIENCY, COST FUNCTION.

References in periodicals archive ?
Policy makers are targeting poor handoffs and communication among clinicians as major sources of economic inefficiency.
discussed the monetary implications of his theory that application of 19th century political economist Henry George's land tax ideas would allow for the social appropriation of natural resources and help eliminate inequality and economic inefficiency.
Lieberman characterizes the current proposal as "raising taxes on energies that work in order to subsidize energy sources that don't work," referring to the economic inefficiency of biofuel and wind power.
Consequently, there is a structural economic inefficiency associated with the health choices made by these working families; this leads to a strong tendency to over-consume because the cost in foregone future cash income is not evident, and there is a reduced consumer incentive to seek value for money.
This finding is also consistent with our belief that studies such as ours that attempt to measure economic inefficiency should measure it against the best-practice, or world, frontier.
The revolution has run its course, grounding itself on the shoals of economic inefficiency and the oppressive society the fundamentalists have imposed.
With the cold war over, and their own economies sputtering, Western nations have become less tolerant of waste and economic inefficiency in aid-receiving countries.
In order to minimize economic inefficiency, the system should permit businesses to recover fully the taxes embedded within their purchases.
Other arguments about the dehumanizing effects of slavery on slaveholders, about the natural rights of men, "equality, and independency"; about the economic inefficiency of slave labor; and about the needless suffering of slaves, including "the poor, wretched, and helpless females," occur as well (78-80).
One general criticism, among many others, levelled at such enterprises included the charge of economic inefficiency.
The energy sectors of South Asia have many features in common, including public ownership and management, poor governance and, consequently, economic inefficiency -- including system insolvency," according to Bob Beckman, USAID regional coordinator and program manager for SARI/E-II.