Convergence in Productivity Across Industries: Some Results for New Zealand and Australia
New Zealand shares a wealth of common interests and experiences with Australia. This has tempted some to assume that these economies form an 'Economic Club', in which one would expect to identify common aggregate trends and growth experiences. In this paper we present results that test, and generally reject, convergence in labour productivity across Australia and New Zealand, using both aggregate and disaggregate, industry-level data. We find that only two industries satisfy our definition of Conditional Convergence (Agriculture, Forestry and Fishing and Cultural and Recreational Services), and that the Mining and Wholesale Trade industries have particularly important roles to play in explaining the measured divergence. Cointegration-based tests reveal more stochastic trends governing Australian productivity than in New Zealand. The evidence suggests, therefore, that the underlying growth processes of the two economies are fundamentally different, thereby questioning the relevance of aggregate comparisons between them. New evidence using industry-level data does not, therefore, resolve the aggregate-level 'non-convergence puzzle' identified here, and elsewhere.
Volume (Year): 21 (2007)
Issue (Month): 1 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/CIRA20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/CIRA20|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bernard, Andrew B & Jones, Charles I, 1996.
"Productivity across Industries and Countries: Time Series Theory and Evidence,"
The Review of Economics and Statistics,
MIT Press, vol. 78(1), pages 135-146, February.
- Bernard, A.B. & Jones, C.I., 1993. "Productivity Across Industries and Countries: Time Series Theory and Evidence," Working papers 93-17, Massachusetts Institute of Technology (MIT), Department of Economics.
- Bernard, Andrew B. & Durlauf, Steven N., 1996. "Interpreting tests of the convergence hypothesis," Journal of Econometrics, Elsevier, vol. 71(1-2), pages 161-173.
- Bernard, A.B. & Durlauf, S.N., 1994. "Interpreting Tests of the Convergence Hypothesis," Working papers 9401r, Wisconsin Madison - Social Systems.
- Andrew B. Bernard & Steven N. Durlauf, 1994. "Interpreting Tests of the Convergence Hypothesis," NBER Technical Working Papers 0159, National Bureau of Economic Research, Inc.
- 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.
- 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.
- Zivot, Eric & Andrews, Donald W K, 1992. "Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis," Journal of Business & Economic Statistics, American Statistical Association, vol. 10(3), pages 251-270, July.
- Eric Zivot & Donald W.K. Andrews, 1990. "Further Evidence on the Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Cowles Foundation Discussion Papers 944, Cowles Foundation for Research in Economics, Yale University.
- Tom Doan, "undated". "ZIVOT: RATS procedure to perform Zivot-Andrews Unit Root Test," Statistical Software Components RTS00236, Boston College Department of Economics.
- Bernard, Andrew B & Durlauf, Steven N, 1995. "Convergence in International Output," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(2), pages 97-108, April-Jun.
- Bernard, A.B. & Durlauf, S.N., 1993. "Convergence in International Output," Working papers 93-7, Massachusetts Institute of Technology (MIT), Department of Economics.
- MacKinnon, James G, 1996. "Numerical Distribution Functions for Unit Root and Cointegration Tests," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(6), pages 601-618, Nov.-Dec..
- James G. MacKinnon, 1995. "Numerical Distribution Functions for Unit Root and Cointegration Tests," Working Papers 918, Queen's University, Department of Economics.
- Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
- 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, 05.
- 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. Full references (including those not matched with items on IDEAS)