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Productivity growth and prices in Canada : what can we learn from the US experience ?
| Content Provider | Semantic Scholar |
|---|---|
| Author | Macklem, Tiff Yetman, James |
| Copyright Year | 2001 |
| Abstract | In recent years, there has been increasing discussion about the possible emergence of a new economy. In this paper we review recent developments in productivity growth and prices of final goods and services in the United States in an effort to identify early indicators of whether the Canadian economy is on a path to follow the United States to higher productivity growth. We put particular emphasis on the behaviour of prices, since monetary policy in Canada is directed towards maintaining low and stable inflation. Although there is little evidence to date of a US-style acceleration in productivity growth in Canada, we suggest that there are several reasons to be cautiously optimistic that Canada will follow the US experience to some degree. We formalise one aspect of this hypothesis using estimated, expectations-augmented Phillips curves. We present evidence for the United States of changes in the relationship between prices and output that would be consistent with the emergence of the new economy, the effects of which have been largely concentrated in the provision of final goods. We then provide evidence of a similar break for Canada in 2000. However, with only two quarters of data for 2000, considerable uncertainty remains as to the timing, size and duration of any acceleration in productivity growth in Canada. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://www.bis.org/publ/bppdf/bispap03b.pdf |
| Alternate Webpage(s) | https://www.bis.org/publ/bppdf/bispap03b.pdf |
| Alternate Webpage(s) | http://www.csls.ca/events/cea01/macklem.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
