An enquiry into the nature of economic growth in New Zealand, 1972 - 1982, using input-output data

Abstract

Input-output tables for the New Zealand economy are used in an analysis of growth in the decade, 1972-1982. This analysis involves decomposing the changes in value added in each sector in order to obtain estimates of the fraction of total value added change which was attributable to the changing level and pattern of final demands. Similarly an estimate of the fraction of value added change attributable to the changes in the input-output coefficients is also obtained. It is shown that coefficient change causes both very high and very low levels of growth in some industries, but these industries account for only a small fraction of the total economy-wide growth. The effects of final demand changes, however, are shown to be more consistent between different industries and is the most important cause of growth, of the two factors, for the majority of industries. Some implications for the effectiveness of demand management policies are then drawn from these results.