KEY POINTS:
That New Zealand is enjoying its longest period of economic growth since World War II has become something of a mantra for Finance Minister Michael Cullen.
He said it in his speech to the Auckland Chamber of Commerce last Thursday and again on Friday.
Economists happily argue until
the cows come home about how best to define business cycles, identify their turning points and date the beginning and end of expansion phases.
Was there one long expansion from the early 1950s to the mid-1960s, for example - in which case Cullen is exaggerating - or should it be broken into three shorter ones?
But the way the Reserve Bank calculates at least the current expansion, which started in 1998, is already the longest we have seen in the past 50 years.
Whether it can survive the combined impact of a global slowdown, a housing market correction and a drought remains to be seen.
Longest is one thing, however, strongest is another.
The current expansion was the strongest since the early 1970s, Cullen said. Again that is consistent with the central bank's analysis. But the cumulative growth between 1959 and 1966 was greater than the current expansion has delivered so far, and the one that followed (1967 to 1975) delivered as much growth in eight years as we have managed over the past 10.
At first glance two features underpinning the prosperity of the 1960s have returned: full employment and favourable terms of trade (a measure of the international purchasing power of a basket of exports - how many cars you can get for a container load of milk powder).
At 3.4 per cent the unemployment rate is the lowest it has been since comparable statistics were first compiled 22 years ago.
And the terms of trade are the strongest they have been since March 1974. But the stronger growth rates of the 1960s did not require nearly so many women in the paid workforce, said economic historian Gary Hawke, head of Victoria University's School of Government.
The biggest problem in keeping growth going was the number of young people leaving.
Economist Brian Easton said: "We are probably running more short of labour than at any time since the 50s. If we are to continue to expand it will have to be through higher productivity of labour."
There were grounds to believe the terms of trade would continue to improve, he said. As China and India industrialised more people could afford the foods of affluence.
