mardi 10 mars 2015
RBA Kent: Australian Economic Growth – The How, What and Where
Posted on 15:22 by nice news
I'd like to thank the Board and members of the RSL & Services Clubs Association for their invitation to speak here.
I want to consider three closely related questions I am often asked:
How can the Australian economy become more productive?
What will help generate additional growth (in demand) needed to boost employment?
Where is that growth going to come from? In particular, which industries will have the profitable opportunities that will lead to more employment and drive investment?
It is hardly surprising that Australians are interested in these questions given the rise in the unemployment rate and sub-trend growth of the economy over the past couple of years.
How to be more productive?
From the middle of the previous decade, Australia enjoyed a sharp run-up in the prices of our key commodity exports. This led to an unprecedented boom in mining investment. The benefits were spread beyond the narrow confines of the mining industry in numerous ways, with strong growth in employment and wages across a range of industries around the country.[1]
But now that commodity prices and mining investment have turned down, it is natural to ask: how are we going to sustain and build on our standard of living over the longer term? This boils down to two essential elements. We can work more (i.e. raise our labour force participation). We can also work more efficiently. In other words, we can boost our (labour) productivity, which is the source of sustainable gains in wages and profits (in the absence of a resurgence in commodity prices).[2] I've spoken elsewhere about participation, so let me focus here on productivity.[3]
There are a number of sources of growth in labour productivity (i.e. output per hour worked):
technological progress, which supp
I want to consider three closely related questions I am often asked:
How can the Australian economy become more productive?
What will help generate additional growth (in demand) needed to boost employment?
Where is that growth going to come from? In particular, which industries will have the profitable opportunities that will lead to more employment and drive investment?
It is hardly surprising that Australians are interested in these questions given the rise in the unemployment rate and sub-trend growth of the economy over the past couple of years.
How to be more productive?
From the middle of the previous decade, Australia enjoyed a sharp run-up in the prices of our key commodity exports. This led to an unprecedented boom in mining investment. The benefits were spread beyond the narrow confines of the mining industry in numerous ways, with strong growth in employment and wages across a range of industries around the country.[1]
But now that commodity prices and mining investment have turned down, it is natural to ask: how are we going to sustain and build on our standard of living over the longer term? This boils down to two essential elements. We can work more (i.e. raise our labour force participation). We can also work more efficiently. In other words, we can boost our (labour) productivity, which is the source of sustainable gains in wages and profits (in the absence of a resurgence in commodity prices).[2] I've spoken elsewhere about participation, so let me focus here on productivity.[3]
There are a number of sources of growth in labour productivity (i.e. output per hour worked):
technological progress, which supp
RBA Kent: Australian Economic Growth – The How, What and Where
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