Productivity Growth in New Zealand: Economic Reform and the Convergence Hypothesis

Reserve bank of New Zealand Discussion Paper No. G98/2

18 Pages Posted: 28 Oct 2002

See all articles by Ben Hunt

Ben Hunt

International Monetary Fund (IMF) - Research Department

Paul Conway

WESTPAC Institutional Bank - Economic Team

Date Written: June 1998

Abstract

The recent productivity experience of the New Zealand economy is examined using a cyclically-adjusted or trend measure of Total Factor Productivity (TFP). On the basis of this measure, the results of estimating a leader-follower convergence relationship suggest that productivity in New Zealand has been converging to US levels through a process of technological diffusion. The evidence also tentatively suggests that the size of the steady-state gap in the levels of TFP between New Zealand and the US decreased in the early 1990s. Although the evidence presented here is encouraging, it should be interpreted with considerable caution given that the post-reform sample period is very short and the method used to measure the steady-state levels gap is preliminary.

JEL Classification: O40

Suggested Citation

Hunt, Benjamin and Conway, Paul, Productivity Growth in New Zealand: Economic Reform and the Convergence Hypothesis (June 1998). Reserve bank of New Zealand Discussion Paper No. G98/2, Available at SSRN: https://ssrn.com/abstract=321396 or http://dx.doi.org/10.2139/ssrn.321396

Benjamin Hunt (Contact Author)

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Paul Conway

WESTPAC Institutional Bank - Economic Team ( email )

PO Box 691
Wellington
New Zealand
(644) 381-1414 (Phone)

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