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New Zealand's productivity performance and prospects

Author

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  • Aaron Drew

    (Reserve Bank of New Zealand)

Abstract

New Zealand’s medium-to-longer-run growth prospects and general standard of living critically depend upon its labour productivity performance. Relative to most OECD countries, the level of labour productivity in New Zealand is low and,when measured as GDP per worker, the historic growth performance has also been relatively poor. The apparently poor performance is a key concern for policymakers and has attracted much research attention. The focus has been to understand why performance has not been better, given that cross-country indicators of New Zealand’s economic environment broadly suggest New Zealand should be amongst the highest performers, not a laggard. In this article, the research is synthesised and recent official productivity data released by Statistics New Zealand (SNZ) is analysed. A key conclusion is that the historic productivity performance has in fact been significantly better than is suggested by looking at the aggregate measures of productivity in isolation, and there is some cause for optimism that this will continue.

Suggested Citation

  • Aaron Drew, 2007. "New Zealand's productivity performance and prospects," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 70, March.
  • Handle: RePEc:nzb:nzbbul:march2007:3
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    File URL: http://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Bulletins/2007/2007mar70-1drew.pdf
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    References listed on IDEAS

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    1. Julia Hall & Grant M Scobie, 2006. "The Role of R&D in Productivity Growth: The Case of Agriculture in New Zealand: 1927 to 2001," Treasury Working Paper Series 06/01, New Zealand Treasury.
    2. David Hargreaves & Hannah Kite & Bernard Hodgetts, 2006. "Modelling New Zealand inflation in a Phillips curve," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 69, September.
    3. Edward J. Balistreri & Christine A. McDaniel & Eina Vivian Wong, 2003. "An Estimation of U.S. Industry-Level Capital-Labor Substitution," Computational Economics 0303001, EconWPA.
    4. Alan Bollard, 2005. "New Zealand's potential growth rate," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 68, March.
    5. Julia Hall & Grant Scobie, 2005. "Capital Shallowness: A Problem for New Zealand?," Treasury Working Paper Series 05/05, New Zealand Treasury.
    6. William Easterly, 2002. "The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262550423, January.
    7. Erwin Diewert & Denis Lawrence, 1999. "Measuring New Zealand’s Productivity," Treasury Working Paper Series 99/05, New Zealand Treasury.
    8. Gregg, Paul & Wadsworth, Jonathan, 2000. "Mind the Gap, Please: The Changing Nature of Entry Jobs in Britain," Economica, London School of Economics and Political Science, vol. 67(268), pages 499-524, November.
    9. Bryn Battersby, 2007. "Does distance matter?: The effect of geographic isolation on productivity levels," OECD Economic Studies, OECD Publishing, vol. 2006(1), pages 205-225.
    10. Paul Conway & Ben Hunt, 1997. "Estimating potential output: a semi-structural approach," Reserve Bank of New Zealand Discussion Paper Series G97/9, Reserve Bank of New Zealand.
    11. L Christopher Plantier & Ozer Karagedikli, 2005. "Do so-called multivariate filters have better revision properties? An empirical analysis," Computing in Economics and Finance 2005 250, Society for Computational Economics.
    12. Belorgey, Nicolas & Lecat, Remy & Maury, Tristan-Pierre, 2006. "Determinants of productivity per employee: An empirical estimation using panel data," Economics Letters, Elsevier, vol. 91(2), pages 153-157, May.
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    Cited by:

    1. L. J. Perry, 2008. "Rejoinder to 'A Note on Perry's Reconsideration of Macroeconomic Evidence from New Zealand'," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 41(4), pages 394-398, December.
    2. Paul Dalziel & David Peetz, 2008. "A Note on Perry's Reconsideration of Macroeconomic Evidence from New Zealand," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 41(4), pages 389-393, December.
    3. Aaron Drew & Rishab Sethi, 2007. "The transmission mechanism of New Zealand monetary policy," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 70, June.

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