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Treasury Policy Perspectives. Graeme Davis Macroeconomic Policy Division. multiplied by. Participation rate multiplied by 1 – unemployment rate multiplied by Average hours worked. Participation. multiplied by. GDP per hour worked. Productivity. Treasury’s 3 Ps Framework.
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Treasury Policy Perspectives Graeme DavisMacroeconomic Policy Division
multiplied by Participation rate multiplied by 1 – unemployment rate multiplied by Average hours worked Participation multiplied by GDP per hour worked Productivity Treasury’s 3 Ps Framework GDP per capita = Proportion of population of working age Population
Comparisons of Australia with the United States Australian GDP per capita as a per cent of the United States GDP per capita % of US Source: Groningen Growth and Development Centre and The Conference Board (2004)
Comparisons of Australia with the United States Australian hours worked per capita as a per cent of the United States GDP per capita % of US Population and Participation % of US Source: Groningen Growth and Development Centre and The Conference Board (2004)
Comparisons of Australia with the United States Australian GDP per hour worked as a per cent of the United States GDP per capita % of US Population and Participation % of US Productivity % of US Source: Groningen Growth and Development Centre and The Conference Board (2004)
Mining Health & Community Services Accommodation, Cafes Retail Trade & Restaurants Cultural, Recreational, Transport Government Administration Personal & Other & Storage & Defence Education Property & Services Finance Business Construction & Insurance Agriculture Services Wholesale Communications Trade Electricity Manufacturing Gas & Water Australian industry productivity levels relative to the United States (1985) Index (US=100) Index (US=100) 200 200 100 100 0 0 Employment
Transport & Storage Mining Health & Community Services Accommodation, Cafes Electricity Gas & Water & Restaurants Education Cultural, Recreational, Finance & Insurance Personal & Other Agriculture Services Government Administration Construction & Defence Communications Wholesale Trade Retail Property & Trade Business Manufacturing Services Australian industry productivity levels relative to the United States (2001) Index (US=100) Index (US=100) 200 200 100 100 0 0 Employment
Context affecting Australia • Internal geography • Location • Population • History and historical linkages • Natural endowments
Distance to World GDP Australia United Kingdom
Summary Current questions… • Does Australia’s context limit our ability to close the productivity gap? • To what extent can policy be used to close the productivity gap?