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Two Australian Navy warships, the HMAS Sydney (front) and HMAS Ballarat arrive in New York harbor, July 19, 2009. The Australian ships and more than 400 sailors will visit Manhattan as part of of a six month international deployment. REUTERS/Trevor Collens/Pool (UNITED STATES MILITARY POLITICS IMAGES OF THE DAY) FOR EDITORIAL USE ONLY. NOT FOR SALE FOR MARKETING OR ADVERTISING CAMPAIGNS - RTR25TWX
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Policies to enhance Australia’s growth: A U.S. Perspective

Martin Neil Baily

Slow economic growth is a serious problem for some of the world’s largest advanced economies, the Great Recession contributing to the slowdown for several regions. Australia’s economic slowdown, however, was small in contrast to that suffered by other advanced economies as a result of the global recession. With an average 2.72 percent GDP growth over the decade 2005-2015, Australia’s economic growth was more than a percentage point faster than that of Germany or the United States. Australia is also celebrating 25 years without a recession, having avoided the pitfalls of the global financial crisis and failures of its major banks.

Martin Baily examines Australia’s economic ecosystem, with a look toward innovation, productivity growth and competitiveness, while pulling together lessons in the three from the United States. In this paper, he examines industry policies along with those policies’ rationale and most important criticisms, and innovation policies in the United States.

Baily also looks at aggregate and broad industry level productivity, and competitiveness using a new measure of a country’s structural competitiveness.

Utilizing this framework to measure Australia’s competitiveness, he compares data for Australia and the U.S. while also applying lessons from the United States to an Australian context to aid in determining policies to enhance Australia’s economic performance.

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The Brookings Institution is a nonprofit organization devoted to independent research and policy solutions. Its mission is to conduct high-quality, independent research and, based on that research, to provide innovative, practical recommendations for policymakers and the public. Support for the research on which this publication is based was generously provided by the Government of Australia Department of Industry Innovation and Science. The conclusions and recommendations of any Brookings publication are solely those of its author, and do not reflect the views of the Institution, its management, or its other scholars.  Nor do the views reflect the positions of the Department of Industry, Innovation and Science.  Brookings recognizes that the value it provides is in its absolute commitment to quality, independence, and impact. Activities supported by its donors reflect this commitment.

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