I actually think the D16 might improve your fuel economy, because the small cam has lower lift and should improve combustion stability at very low rpm. That said, in the midrange it could induce more throttling losses because it has more torque available, so hard to say. I think if you're putting in a new motor you should take the opportunity to shave the head for higher compression, since it's easier/cheaper with the motor out of the car.
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