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Outside the Club: New Zealand's economic growth, 1870-1993


  • David Greasley
  • Les Oxley


Recent tests of the Convergence Hypothesis, or the tendency for per capita income levels to narrow over time, have included a time-series testing approach (see Bernard & Durlauf, 1995, 1996; Oxley & Greasley, 1995, Greasley & Oxley, 1997, 1998a). Results have been mixed, with Bernard & Durlauf finding no evidence of convergence whereas Oxley & Greasley find evidence of two small convergence clubs. This paper adds to the debate by considering a newly created annual per capita income series for New Zealand, 1870-1993. The results show that the series is integrated of order 1, I(1), and neither a single break nor joint breaks overturn the null of a unit root. Combined with results from Greasley & Oxley (1998a, 1998b), this property of New Zealand data is incompatible with her belonging to a UK/Australia convergence club, or converging towards either of the North American economies. New Zealand per capita income growth is idiosyncratic, diverging below the growth rates of traditional trading partners. A conjunction of small size and insular economic policies distinguishes New Zealand's economic development.

Suggested Citation

  • David Greasley & Les Oxley, 2000. "Outside the Club: New Zealand's economic growth, 1870-1993," International Review of Applied Economics, Taylor & Francis Journals, vol. 14(2), pages 173-192.
  • Handle: RePEc:taf:irapec:v:14:y:2000:i:2:p:173-192
    DOI: 10.1080/02692170050024732

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    References listed on IDEAS

    1. Bernard, Andrew B. & Durlauf, Steven N., 1996. "Interpreting tests of the convergence hypothesis," Journal of Econometrics, Elsevier, vol. 71(1-2), pages 161-173.
    2. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    3. Zivot, Eric & Andrews, Donald W K, 2002. "Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 25-44, January.
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    5. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-963, September.
    6. David Greasley & Les Oxley, 1998. "A Tale of Two Dominions: Comparing the Macroeconomic Records of Australia and Canada Since 1870," Economic History Review, Economic History Society, vol. 51(2), pages 294-318, May.
    7. Oxley, Les & Greasley, David, 1995. "A Time-Series Perspective on Convergence: Australia, UK and USA since 1870," The Economic Record, The Economic Society of Australia, vol. 71(214), pages 259-270, September.
    8. Greasley, David & Oxley, Les, 1997. "Time-series based tests of the convergence hypothesis: Some positive results," Economics Letters, Elsevier, vol. 56(2), pages 143-147, October.
    9. Greasley, David & Oxley, Les, 1998. "Comparing British and American Economic and Industrial Performance 1860-1993: A Time Series Perspective," Explorations in Economic History, Elsevier, vol. 35(2), pages 171-195, April.
    10. Baumol, William J & Wolff, Edward N, 1988. "Productivity Growth, Convergence, and Welfare: Reply," American Economic Review, American Economic Association, vol. 78(5), pages 1155-1159, December.
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    12. Rappoport, Peter & Reichlin, Lucrezia, 1989. "Segmented Trends and Non-stationary Time Series," Economic Journal, Royal Economic Society, vol. 99(395), pages 168-177, Supplemen.
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    15. By DAVID GREASLEY & LES OXLEY, 1996. "Discontinuities in competitiveness: the impact of the First World War on British industry," Economic History Review, Economic History Society, vol. 49(1), pages 82-100, February.
    16. James G. MacKinnon, 1990. "Critical Values for Cointegration Tests," Working Papers 1227, Queen's University, Department of Economics.
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    Cited by:

    1. Mayer-Foulkes, David, 2001. "Convergence Clubs in Cross-Country Life Expectancy Dynamics," WIDER Working Paper Series 134, World Institute for Development Economic Research (UNU-WIDER).
    2. Leandro Prados de la Escosura, 2015. "World Human Development: 1870–2007," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(2), pages 220-247, June.
    3. Kenneth E. Jackson, 2011. "Globalisation, Agriculture and Development: New Zealand’s Path to Prosperity?," Chapters,in: Globalisation, Agriculture and Development, chapter 4 Edward Elgar Publishing.

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