The New Zealand economy is noteworthy in policy circles for its turnaround during the 1980s and early 1990s. Starting from a state of semi-autarky in the early 1980s, the country now has a much more flexible and efficient economic structure. In the 15 years to 1999, successive governments...

This paper (a) provides a framework for quantifying any economy's flexibility, and (b) reviews the evidence on New Zealand firms' birth, growth and death. The data indicate that, by and large, the labour market and the financial market are doing their job