If there were one chart I would use to illustrate the story of New Zealand’s economic performance over the last 25 years, this would be it.
- Click to enlarge
The chart is taken from a presentation to a Business Roundtable retreat last month by Dr Roderick Deane (the presentation is on our website).
It illustrates the trend in multifactor productivity growth, which is perhaps the most important productivity measure. MFP captures productivity changes (due to things like innovation and technology improvements) that cannot be attributed to capital and labour.
The story is that New Zealand’s multifactor productivity performance improved dramatically, to become among the best in the OECD, in the post-reform period.
Then, for all the Labour-led government’s talk about ‘growth and innovation’, it slumped in the last decade, with the retreat from reform and policy reversals, to a rate not seen since the Muldoon years.
There is still far…
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Utopia, you are standing in it! 
Oct 24, 2014 @ 20:00:53
It seems to me Roger Kerr is mixing up labour productivity with multi-factor productivity.
The most important part of multi-factor productivity is what occurs to capital productivity. The reforms or backing would affect labour productivity.
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