Journal article

Lifting New Zealand's productivity - a research agenda

16 May 2014

Sebastian Edwards (2013) wrote that when it comes to the economy New Zealand appears to exhibit ‘Woody Allen syndrome’. In most of Allen’s movies, he observed, the main character is leading what appears to be a charmed life (‘interesting friends, a nice apartment, and a well-paying job’) but he still worries a lot. New Zealanders too ‘worry a lot. They worry about the economy and about the country’s position in the world.’ And, as Edwards went on to note, as ‘Woody’s movies progress, the viewers realise that, although he is sweet and loveable, he has certain traits that could be improved on. ... Similarly, and in spite of New Zealand’s wonderful showing in ranking after ranking, there are a number of areas where reforms would make the country’s position in the world even better.’

So it is with New Zealand’s productivity, which is a measure of the economy’s ability to turn resources into goods and services. The latest figures suggest we are doing well. Over the last couple of years measured sector output, labour productivity and multi-factor productivity have all been growing. And not only is labour productivity growth picking up, but labour inputs are slowly increasing too. Yet, when considered in a wider context, the picture is not quite as rosy.

Patrick Nolan joined the Productivity Commission as a Principal Advisor in the Economics and Research team in February 2014. Before this he spent five years as the Chief Economist of Reform, a cross-party British think tank focused on public services and economic prosperity. Patrick completed his PhD on Working for Families in the School of Government at Victoria University of Wellington.

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