When will New Zealand catch up with Australia?

Trinh Le

Macroeconomics Working Papers from East Asian Bureau of Economic Research

Abstract: New Zealands average income, defined as GDP per capita, is now three quarters that of Australia and even lower than in Australias poorest state, Tasmania. Over the last seven years, New Zealand has grown slightly faster than Australia, but at these rates, it would still take 140 years to close the trans-Tasman income gap. To catch up with Australia in five to 10 years, New Zealand would need to grow at between 4.7% and 7.6% per year. This exceeds New Zealands highest average annual growth rate over a five-year period of 4.6%, in the early 1960s. These calculations hold Australian growth rates constant at its annual average over 2000 to 2007. If Australia were to grow faster than its recent performance, the growth rates required of New Zealand to catch up with Australia would be even higher. While such growth rates are not impractical, New Zealand is not currently on track to achieve them, given its recent poor record on labour productivity. Catching up with Australia is not impossible, but very unlikely without major changes to New Zealands policy directions. The challenge is for its policy makers to put forward sensible policies and to carry them through to fruition in the years to come.

Keywords: Australia; New Zealand; economic growth; economic policy (search for similar items in EconPapers)
JEL-codes: O40 (search for similar items in EconPapers)
Date: 2008-01
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.eaber.org/node/23082 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 301 [REDIRECT LOOP] Moved Permanently (http://www.eaber.org/node/23082 [301 Moved Permanently]--> https://www.eaber.org/node/23082 [301 Moved Permanently]--> https://www.eaber.org/node/23082 [301 Moved Permanently]--> https://www.eaber.org/node/23082 [301 Moved Permanently]--> https://www.eaber.org/node/23082 [301 Moved Permanently]--> https://www.eaber.org/node/23082 [301 Moved Permanently]--> https://www.eaber.org/node/23082 [301 Moved Permanently]--> https://www.eaber.org/node/23082)

Related works:
Working Paper: When will New Zealand catch up with Australia? (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eab:macroe:23082

Access Statistics for this paper

More papers in Macroeconomics Working Papers from East Asian Bureau of Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Shiro Armstrong ().