Australia's annual rate of multifactor productivity growth accelerated a full percentage point in the 1990s. The fact that most other OECD countries did not share this experience suggests that domestic factors must have provided at least a major part of the explanation. This article establishes six stylised facts about Australia's 1990s productivity performance and then surveys available analytical studies to find explanations for them. With few aggregate models available to shed light on recent output and productivity growth, the survey also covers cross‐country, industry and firm‐level studies. Despite various shortcomings in data and specification of models, a reasonably clear picture emerges. The accumulation of physical and human capital has laid a long‐term foundation for productivity growth. On top of this foundation, the greater openness of the economy to trade and investment, increased R&D activity and a strong uptake and innovative use of ICT have been specific sources of the productivity revival. There is also evidence that policy and institutional factors have been important in driving and enabling these determinants.

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Australia's 1990s Productivity Surge and Its Determinants 475. The differences in value added and KLEMS approaches are discussed by, for example, Gullickson and Harper (1999).

A terms-of-trade shock boosted growth in income and living standards over the past decade. It also brought on Australia's productivity growth slump. Now that the terms of trade have peaked, re-invigorated productivity growth is needed to boost income and living standards. However, the economy is still going through the adjustments that have stifled productivity growth. Australians may not enjoy the same growth in prosperity as they have over the past two decades.

A commonly used, but unadjusted, measure of Australian mining multifactor productivity (MFP) fell by about one-third over the first decade of the mining boom, coinciding with very large increases in resource prices. Using growth accounting methods and our own adjustments, based on energy use and capital-output lags to account for depletion effects we find (i) the Australian annual average MFP growth in mining was 2.5 per cent a year between 1985-1986 and 2009-2010 compared to À0.65 per cent for the unadjusted measure and (ii) productivity growth was positive in the 2000s, albeit at a lower rate than in the 1990s. Our adjusted MFP growth measures at a state level and subsector level are greater than unadjusted productivity measures. In a complementary study using an econometric decomposition of mining MFP at a state level, we find no statistically significant effect of technological change on MFP growth in the sector, but positive and statistically significant effects of technical efficiency and scale over the period 1990-1991 to 2009-2010. Our results do not support specific policy interventions to increase productivity growth in the mining sector beyond appropriate incentives for resource exploration including the provision of precompetitive resource data.