The Terms of Trade and Domestic Spending

Ryan Macdonald

Insights on the Canadian Economy from Statistics Canada, Economic Analysis Division

Abstract: This paper empirically illustrates the impact of ongoing changes to Canada's terms of trade. It provides a discussion of how the terms of trade are measured and how to interpret terms of trade shifts. Examples of two major factors affecting Canada's terms of trade are provided, followed by an empirical analysis of how the terms of trade improvements that began in early 2003 have affected consumption, investment and import activity. The paper concludes by illustrating why final domestic demand growth has outpaced real GDP growth since 2003.

Keywords: Economic accounts; Gross domestic product; Income and expenditure accounts (search for similar items in EconPapers)
Date: 2008-01-17
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:stc:stcp2e:2008018e

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