Productivity growth in New Zealand: 1978-1998

This paper addresses aspects of New Zealand's economic performance by first analysing the country's relative international position against a comparative group of five OECD countries. Cointegration test results fail to confirm prima facie evidence that New Zealand's per capita output is on a clear divergence path from the rest of the group. A detailed analysis of New Zealand productivity trends at the sectoral level is carried out next. The results indicate that removal of government protectionist measures has in general been associated with enhanced productivity performance. This may have contributed to keeping the output gap from other OECD countries from widening.