What Happened to Australia's Productivity Surge?

Abstract

"Australia's productivity has grown 1 percentage point per year slower in the current decade than in the 1990s. This article shows that almost one-half of the slowdown is related to unusual developments in the mining industry, the effects of drought and the overstatement of productivity growth in the 1990s. Part of the remainder might be as a result of a combination of slower technological change, unmeasured declines in labour quality, the diminishing effects of past reforms and the increasing profitability of Australian firms." Copyright (c)2009 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research.

The city dimension of the productivity growth puzzle: the relative role of structural change and within-sector slowdown

“…While much of the concern over productivity growth in the UK, and in other major economies, has been over its recent slowdown, in fact the problem is of much longer standing (see, for example, Dolman, 2009;Carmody, 2013). Figure 1 shows the post--war trend in labour productivity growth (real gross domestic product per person employed) in the UK economy, with other major OECD countries for comparison.…”

Is irrigated agriculture in the Murray Darling Basin well prepared to deal with reductions in water availability?

“…4). It should be noted that the effects of short-term drought on crop production (several months or a year) and of long droughts (more than one year) on crop production are different, and the latter are less clear (Dolman, 2009). …”

Quantifying “Dog Days”

“…These factors include lags between investment and output expansion (for mining), low rainfall leading to quantity restrictions on water demand and expensive investments in desalination and water treatment (for utilities), and drought (for agriculture). Dolman () finds that the productivity slowdown is not explained by slow‐working factors such as education levels and spending on infrastructure, information technology and R&D. This supports the idea that the productivity slowdown might be transient and that productivity growth has the potential to move back towards its historical average as the atypical structural pressures faced by the Australian economy in the 2000s recede (Parham, ). Nevertheless, the latest productivity figures continue to disappoint, with Productivity Commission () reporting negative market‐sector MFP growth in 2013.…”