Draft Chapter 10 of Transforming New Zealand. Comments welcome.
Keywords: Growth & Innovation;
New Zealand economics suffers from a cultural cringe. Much of the debate is dominated by an idealised model of the American economy. Very little thought is given to in what ways the New Zealand economy differs from the US economy, other than to assume that th differences are unfortunate and must be addressed by making New Zealand more like America.
Third draft of Chapter 6 of Transforming New Zealand. Comments welcome. (Second Draft).
Keywords: Growth & Innovation;
What determines a successful exporter? (Observe the question is in the Porter approach that ‘firms, not nations, compete in international markets’, although we shall see that national economic policy has a role.) The list is long and includes the right product, advanced and advancing technologies, a capable work force, effective marketing and distribution, entrepreneurial initiative, good fortune … However, the single most important requirement is medium term profitability. If the business is not getting enough revenue to pays for its inputs and its debt servicing, it will eventually go bankrupt.
Third draft of Chapter 5 of Transforminng New Zealand. Comments welcome. (Second Draft).
Keywords: Growth & Innovation;
As a general rule, but not exclusively, the sectors which can grow fast in New Zealand – faster than the rest of the economy – are exporting. Indeed world trade – exports and imports – grows about as twice as fast as the world economy (we mention below why this should be so). The export sectors have a key role in the growth of small open multi-sectoral economies, drag the domestic economy along with them, accelerating its growth rate, while largely funding the imports which also tend to grow faster than the rest of the economy. However not all exports can be accelerated.
Third draft of Chapter 3 of Transforming New Zealand. Comments welcome. (Second Draft).
Keywords: Growth & Innovation;
Once upon a time – not so many years ago actually – economic growth was thought to be the result of increasing combinations of labour and capital. Because of ‘diminishing returns’ – that is that each additional dollop of labour and capital was less productive, it was generally assumed that at some time – perhaps in the time of today’s children – economic growth would come to an end and there would be economic stagnation. This was before the days about the worry of exhausting the available resources, and issue returned to briefly later. The stagnation was seen as solely due to diminishing returns in capital and labour.
Third draft of Chapter 2 of Transforming New Zealand. Comments welcome. (Second Draft).
Keywords: Growth & Innovation;
This chapter looks at the level of New Zealand’s production since the war. It uses GDP as an indicator of that level. In doing so it is mindful of the weaknesses of the GDP measure discussed in the previous chapter and its appendix. But GDP remains the best measure we have, and as the book argues later, it seems likely that were a different production objective to be adopted (so products are valued differently form the way they are in GDP) the overall result would not be too different from using GDP as an indicator.
Third draft of Chapter 1 of Transforming New Zealand. Comments welcome. (Second Draft).
Keywords: Growth & Innovation;
In recent years the focus of economic policy has been on increasing GDP, which is a measure of the material production of the economy. The shrillest cries were that New Zealand should accelerate its GDP growth rate to rejoin the top half of the OECD on a per capita basis. As one business journalist, more noted for her rhetoric than her insight asked ‘what could be simpler than that?’ And she was absolutely right for the simple minded who had little conception of what constituted GDP or of how it might be accelerated.
Prologue of Transforming New Zealand. Comments welcome.
Keywords: Growth & Innovation;
After this book had gone through its first draft, the Growth and Innovation Advisory Board, which provides a private sector policy perspective to the government’s economic strategy (and of which I am a member), released its ‘Growth Culture’ study which described the public’s attitudes to economic growth. The report is rich in detail but its main findings were the public was not enamoured with the notion of growth as a key policy objective, and was tired of being told that they had to make sacrifices to increase the economic growth rate.
Draft chapters for a book. Readers are invited to comment on these drafts. Not all chapters are complete. A summary of the main economic themes is in Tractatus Developmentalis Economica.
Keywords: Globalisation & Trade; Growth & Innovation;
Prologue Not written
These draft chapters are on the web
1. The Point of it All.
2. New Zealand’s Post-war Economic Performance
3. Theories of Economic Growth.
4. The Sectoral Approach to Economic Growth
5. Exporting and Growth
6. Competitive Advantage
7. Infrastructure
8. Intervention and Innovation
9. Working with Technological Innovation
These chapters are in preliminary development and may change dramatically.
10. Is Small Beautiful?
10. It’s Not Easy Being Small
12. Taxation and Spending
13. Distributing the Gains
14. The Quality of Life
Appendices On website
A.1. The GDP Target.
A.2. The Maddison-OECD Data Base.
Chapter of TRANSFORMING NEW ZEALAND. This is a draft. Comments welcome.
Keywords: Growth & Innovation; Globalisation & Trade;
The export sectors have a key role in the growth of a small open multi-sectoral economy. They can expand faster than the world economy as a whole, and drag the domestic economy along with them, accelerating its growth rate. However there are different sorts of exports, not all of which can be accelerated.
Keywords: Growth & Innovation; Labour Studies;
New OECD data bases enables the revision updating and extension of an earlier version of Productivity and Employment: New Zealand’s Post-War Economic Growth Performance. It still belongs to a series, Comparison with the OECD and Comparison with Australia.
An earlier version of this paper [1] used the Maddison data base which had some statistics of employment and hours worked, and allowed it to provide some estimates of productivity.[2] Recently the OECD published a more comprehensive. albeit shorter, data base.[3] This paper revises the earlier paper, incorporating the new data.
Listener 5 April, 2003.
Keywords: Environment & Resources; Growth & Innovation;
Lincoln University meteorologist, Neil Cherry, wonders aloud whether New Zealand is too windy to convert its wind power into electricity. Germany with the most wind power installations has winds averaging 6 metres/second. Denmark, the world leader in wind turbine manufacturing, has sites up to just over 7m/s, as has California the biggest wind power state in the US. A typical New Zealand site is 10m/s, which yields at least twice as much power. That means much more stress on the machinery. Half the European made gear boxes on one New Zealand wind farm had to be replaced within the guarantee period (and ten percent of them re-replaced).
Listener: 22 March, 2003.
Keywords: Growth & Innovation; Macroeconomics & Money;
The salutary America Cup image was the sleek black yacht limping back to port. Twice they tried to sail it faster than conditions allowed, the boat shipped tonnes of water, bits broke, and they gave up the race.
Listener 8 February, 2003.
Keywords: Globalisation & Trade; Growth & Innovation; Macroeconomics & Money;
Overseas economists visit New Zealand regularly, seeing politicians, officials, business people, and even independent commentators. One, late last year, began his session with me, by saying that New Zealand’s economic relativity in the OECD had deteriorated throughout the last half century. The government wanted to accelerate our economic growth, he said ,but since coming to office it had
– delayed unilateral tariff cuts;
– raised income tax rates;
– ruled out further privatisation;
– toughened regulation;
– introduced a more active industrial policy ;
– re-regulated the labour market.
He concluded that he did not see a single policy change which would contribute to increasing economic growth.
Metro December 2002, p.84-93, by Gilbert Wong.
Keywords: Growth & Innovation;
An even greater challenge to the orthodoxy that the reforms were good for growth come’s from economist Brian Easton. The problem he identifies is the way the nature of the decline is perceived. While New Zealand is in 20th place 30 years after it was in sixth place, the OECD data does not show a slow and steady decline. Instead, says Easton, it shows stable growth marred by two massive drops that spike down like two steps on the graph of economic growth.
History
Sequencing (December 1983)
Freeze and Thaw
(July 1984)
Ssh …It’s the Big ‘‘D’’ (August 1984)
Confidentially Yours (August 1984)
Devaluation!: Five Turbulent Days in 1984 and Then … (July 1985)
Economic Liberalisation: Where Do People Fit In?
(May 1987)
From Run to Float: the Making of the Rogernomics Exchange Rate Policy (September 1989)
Liberalization Sequencing: The New Zealand Case (December 1989)
Towards A Political Economy of New Zealand: the Tectonics of History (October 1994)
The Wild Bunch?: An Inquiry is Needed to Restore Treasury’s Integrity (August 1996)
The Great Diversification: Ch 9 of Globalization and a Welfare State (December 1997)
The State Steps In: Michael Bassett Makes A Case for Intervention. (August 1999)
Remaking New Zealand and Australian Economic Policy by Shaun Goldfinch (August 2001)
The Treasury and the Nationbuilding State (December 2001)
Evaluation
New Zealand’s Economic Performance This is an Index
Economic and Other Ideas Behind the New Zealand Reforms
(October 1994)
For Whom the Deal Tolls (Of Dogma and Dealers) (August 1996)
The Economic Impact of the Employment Contracts Act (October 1997)
Microeconomic Reform: The New Zealand Experience (February 1998)
Some Macroeconomics of the Employment Contracts Act (November 1998)
View From Abroad: What Do We Know about Economic Growth? (May 1999)
The Model Economist: Bryan Philpott (1921-2000) (August 2000)
Comparison with Australia: New Zealand’s Post-war Economic Growth Performance (August 2002)
The Debate
Waist Deep in the Big Muddy? (February 1991)
Friends in High Places: Rogernomic Policies Have Powerful Allies in Australia (April 1994)
Systemic Failure (December 1995)
Ignoring the Critics (February 1997)
A Permanent Revolution? (March 1997)
In the Dark: The State of Research Into the Economy is An Embarrassment (June 1997)
The New Zealand Experiment: A Model for World Structural Adjustment? (Review) (July 1997)
Out of Tune: Even the Officials Admit the Health Reforms Were Fatally Flawed. (December 1997)
Money for Jams: the Government Response to Roading Reforms is Commercialisation. (January 1998)
Reforms, Risks, and Rogernomics (March 1999)
The London Economist and the New Zealand Economy (December 2000)
Locked Out: of Free Press and Free Economics (May 2001)
A Surplus of Imitation (June 2001)
Government Spending and Growth Rates: A Methodological Debate (January-May 2002)
From Pavlova Paradise Revisited by Austin Mitchell (July 2002)
Manure and the Modern Economy: Has Economic Policy Hardly Changed? (September 2002)
From is This As Good As it Gets? (December 2002)
1999 and All That (January 2004)
Books
The Commercialisation of New Zealand (1997)
In Stormy Seas: the Post-war New Zealand Economy (Chapters 15-16) (1997)
The Whimpering of the State: Policy After MMP (1999)
Will the Recession Be So Severe That it Will Count As the ‘Millennium Depression’?
Listener 2 November, 2002.
Keywords: Globalisation & Trade; Growth & Innovation; Macroeconomics & Money;
There was increasing pessimism about the state of the world economy among the international economic commentators I admire. Those who are paid to talk up the financial markets continue to predict optimistically – so far, four of the last zero economic upturns.
How New Zealand Grows: Some Propositions VERSION 3: Updated 9 December. Original 17 October. The following propositions largely reflect my research program on the New Zealand economy. It is summarised in my In Stormy Seas. Page numbers in square brackets refer to that book. There is additional material in the areas of globalisation, innovation, intra-industry…
Continue reading this entry »
The base references is the book In Stormy Seas. (1997) An extract is Capital and Technological Change: Some International Comparisons.
In early 2004 I updated much of In Stormy Seas in a long paper The Development of the New Zealand Economy. There is also a short version of the paper.
A summary of the policies which flow on from the paper is Tractatus Developmentalis Economica. (October 2002)
Listener 5 October, 2002.
Keywords: Growth & Innovation;
Thirty odd years ago a Banks Peninsular farmer noticed a ewe who produced 33 lambs in 11 years. Subsequently A281, as she became inelegantly called, was handed over to the Invermay branch of what is now AgResearch, one of the Crown Research Institutes. Painstaking research by a team of New Zealand scientists determined A281 had a gene on her X chromosome which caused high fertility. But it was not until the late 1990s (with help of a Finnish scientist) they identified BMP15, usually called the ‘Inverdale’ gene, which differs from the standard gene by one neutral protein sequence being replaced by an acid protein in the DNA.
Listener 21 September 2002.
Keywords: Growth & Innovation;
People keep going on about our low relative performance in the OECD. How bad is it?
We are 20th of the 28 countries in the OECD measure of output per capita. About 86 percent of the OECD average.