ABSTRACT
Economic efficiency is defined in three main ways in economic discourse. First, technical or productive efficiency refers to the use of resources in a technologically most efficient manner. The second measure of economic efficiency, known as allocative efficiency, refers to the efficient distribution of productive resources among alternative uses so as to produce the optimal mix of output. Dynamic or intertemporal efficiency represents the third way of defining economic efficiency. Dynamic efficiency refers to the economically efficient usage of scarce resources through time, and thus, it embraces allocative and productive efficiency in an intertemporal dimension.
