Growth and Productivity in Australia

21 Pages Posted: 18 Jan 2014

See all articles by Benjamin Agbenyegah

Benjamin Agbenyegah

Independent

Harry Bloch

Curtin University of Technology - Curtin Business School - School of Economics and Finance

Date Written: February 1, 2008

Abstract

This paper empirically investigates and identifies the main contributing factors to output and productivity growth in Australia for the period 1950-2005. Cointegration and a vector error-correction model are used along with Granger causality tests, impulse response functions and forecast error variance decomposition analyses to achieve these objectives. Accumulation of human capital and investments in information and communications technology (ICT) are identified as significant in the cointegration analysis of production in Australia and should be included in the long-run production relationship along with fixed capital and labour employed. The vector-error correction model estimates further provide evidence that human capital and ICT are important drivers of output growth in Australia, so their omission from standard productivity measures leads to inaccurate measures and may mislead policy formulation, planning and budgeting decisions.

Keywords: Australia, economic growth, productivity, cointegration, Granger causality, impulse response functions, forecast error variance decomposition, human capital and ICT

Suggested Citation

Agbenyegah, Benjamin and Bloch, Harry, Growth and Productivity in Australia (February 1, 2008). CRAE Research Paper No. 200801. Available at SSRN: https://ssrn.com/abstract=2379855 or http://dx.doi.org/10.2139/ssrn.2379855

Benjamin Agbenyegah

Independent

Harry Bloch (Contact Author)

Curtin University of Technology - Curtin Business School - School of Economics and Finance ( email )

Curtin University
GPO Box U 1987
Perth, 6845
Australia
+61 8 9266 2035 (Phone)
+61 8 9266 3026 (Fax)

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