How to determine if two strings are permutations of each other
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The above method is reasonably efficient - O(n*log(n)) and, as others have shown, very easy to implement using the standard Java API. Even more efficient (but also more work) would be counting and comparing the occurrence of each character, using the char value as index into an array of counts.
I do not thing there is an efficient way to do it recursively. An inefficient way (O(n^2), worse if implemented straightforwardly) is this: