Project Olson.

Real output per person, adjusted for inflation and population growth. Olson argued that accumulating special-interest groups slow growth not by lowering output overnight but by eroding the pace at which living standards rise. Both countries publish this series on a 2000 = 100 base, so trajectories are directly comparable: a line further above 100 has raised living standards faster since 2000. Because the series are in real volume terms, currency conversion is irrelevant, but starting levels differ, so a higher line does not mean a wealthier country.

Inflation measured by the year-ended change in the consumer price index. In Olson’s framework, persistent inflation can signal distributional conflict: groups push for larger shares without a matching rise in output, and the contest shows up in prices. Headline CPI is used for all countries. Australia’s underlying measures (trimmed mean, tradeables and non-tradeables) appear only in its single-country view.

Housing costs relative to the all-groups CPI. Olson’s logic bites hardest here: zoning boards, incumbent homeowners and planning professions share an interest in restricting supply, so where they are entrenched, housing absorbs a growing share of income. A line above 100 means housing has outpaced general inflation since the common March 2000 base; below means it has lagged. Methodologies differ: Australia tracks rents and new dwelling purchase costs separately, while New Zealand tracks rents and purchase of housing. Compare direction, not level.

The gross national expenditure deflator, the broadest measure of domestic price inflation. It captures price changes across everything a nation buys, consumes and invests, wherever it was produced, including capital goods and government purchases that the CPI excludes. Shown in native units, per cent per year.

Wages adjusted for the cost of living: whether a pay packet buys more or less over time. Olson’s logic cuts both ways here: organised labour can capture productivity gains as higher pay, but entrenched insiders can freeze out newcomers and slow the reallocation of labour. A line above 100 means real wages have grown faster than the cost of living since March 2000. Methodologies differ materially, so compare direction, not level.

The share of the labour force without work and actively seeking it. Olson’s insider-outsider dynamic matters here: where established workers are well organised, wages and conditions can be set to keep newcomers out, leaving unemployment persistently higher than necessary. The longer such arrangements persist, the more hysteresis sets in and a cyclical problem becomes structural. Shown in native units, per cent of the labour force.

Unemployment plus inflation, less real income growth per head. Deducting income growth recognises that both are less painful when incomes are rising fast enough to absorb them; each ingredient captures a different way distributional conflict and institutional rigidity show up as hardship. Australia deducts real net disposable income per capita growth; New Zealand deducts real earnings growth. The measures differ, so compare direction, not level.

The ratio of export prices to import prices: how much a country’s exports buy of what it imports. A rise means more foreign goods for the same effort; a fall means less. Olson’s framework is mostly domestic, but favourable terms of trade can mask internal rigidities while adverse terms expose them. Indexed to 100 at the common base year. The construction is comparable across countries, though source index periods differ.

A trade-weighted measure of a currency’s purchasing power, adjusted for relative prices. It captures competitiveness: a rise means domestic goods have become more expensive relative to foreign goods, a fall the reverse. Sclerotic economies, slow to adjust, tend to leak competitiveness over time. Rebased to 100 at the common base year from the original 2020 = 100 publication. Both series are broad, trade-weighted REERs from the Bank for International Settlements.

The real cost of borrowing: a nominal interest rate minus consumer price inflation. High real rates squeeze borrowers and reward savers; low or negative rates do the opposite, and entrenched financial interests shape where the burden falls. Shown in percentage points. Australia uses a spliced advertised-then-actual mortgage rate; New Zealand uses a 90-day bank bill rate. These sit at different points on the yield curve, so compare direction, not level.

General government final consumption as a share of GDP, covering all levels of government on the SNA/OECD basis. Olson’s argument was clearest here: public spending is both a symptom and an instrument of distributional coalitions. As special interests multiply, the state is drawn into transferring and administering resources on their behalf, so the share of output routed through government rises. Whether that reflects healthy collective provision or rent-seeking capture is the central question. Australia’s single-country view also shows consumption plus investment as shares of GDP and GNE.

The real net capital stock of the private business sector, expressed per worker and per head. Capital deepening complements innovation: more capital per worker raises output per hour. Olson predicted that sclerotic economies under-invest, because coalitions defend returns on existing capital and block competing new investment. The source series is already indexed to 2000 = 100. Comparable data for the other countries is not yet available, so this section covers one country.