The Importance of Efficiency in the Economy

Efficiency plays a crucial role in the growth of an economy. Historically, a significant portion of economic growth has come from using existing resources more efficiently. Improving efficiency is beneficial even in light of concerns about climate change. An efficient economy does not necessarily imply growth but rather a higher level of output than an inefficient economy. However, it is important to consider the aspects that are not typically accounted for in the market, such as environmental factors that tend to be overexploited. When measuring economic growth over the past 50 years, a substantial part of it can be attributed to increased efficiency.