Growth and Productivity in Papua New Guinea
30 Pages Posted: 21 Jun 2006
Date Written: May 2006
This paper has examined Papua New Guinea's historical economic growth patterns through a simple growth accounting framework. The analysis shows that swings in growth are mostly accounted for by a significant slowdown in capital input and lower Total Factor Productivity (TFP) growth. It also suggests that raising real GDP growth will require increases in both investment levels and productivity. With a ratio of investment to GDP of 13 percent during the last decade, significantly higher productivity growth and investment will be needed to sustain GDP growth rates at 5 percent or higher. The historical performance also indicates that, in the absence of structural reforms and strong institutions, higher rates of productivity growth will be hard to achieve.
Keywords: GDP Growth, Total Factor Productivity, Papua New Guinea
JEL Classification: E25, E31, E32, E37
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