economic efficiency


Also found in: Encyclopedia, Wikipedia.

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 ?
This method provides a tool for assessing economic efficiency among different institutions.
Bowles does not stop at diagnosing the negative impact of inequality on economic efficiency.
Major aim of this Ordinance was to provide for a legal framework to create a business environment based on healthy competition for improving economic efficiency, developing competitiveness and protecting consumers from anti-competitive practices.
Key to a successful implementation of such projects is economic efficiency.
These stresses and strains may cause severe damage during a wind turbine's life cycle that needs to be repaired in order to safeguard the turbine's economic efficiency.
To date both companies have positioned coal, which offers both stable supply and economic efficiency, as an important energy source, and have worked toward improving its efficiency through high-temperature, high-pressure steam conditions in coal-fired generators.
The economic efficiency is a modern concept that expresses the cause-and-effect connection between effort and effect, and by analysing the economic efficiency indicators we allocate the resources to their maximum efficiency, under a rational development at the micro and macroeconomic level.
Setting user fees according to the beneficiary-pays principle can promote equity and economic efficiency.
The Tory leader said that "social justice and economic efficiency are the common ground of British politics".
Honda, a major customer for SDK's heat exchangers, pursues very high levels of economic efficiency and environmental performance in the new models announced on September 22.
Brand-name producers have better economic efficiency than ordinary-name producers.

Full browser ?