The Canadian productivity stagnation, 20022014

Juan Carlos Conesa and Pau Pujolas

Canadian Journal of Economics, 2019, vol. 52, issue 2, 561-583

Abstract: Total factor productivity (TFP) growth in Canada between 2002 and 2014 has been only 0.16% per year. This figure is substantially smaller than that of the United States, or that of Canada in the past. We perform multiple counterfactual exercises to show that this small TFP growth cannot be accounted for by several compositional effects or mismeasurements of factors of production. We identify two key sectors (mostly Mining and to a lesser extent Manufacturing) that drive all of the TFP growth difference with the United States. Despite the lack of TFP growth, Canada has experienced sustained income growth due to a prolonged period of appreciation of the terms of trade (while US terms of trade have deteriorated), making real income in the two countries grow at similar rates.

JEL-codes: O47 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: The Canadian productivity stagnation, 2002–2014 (2019)
Working Paper: The Canadian Productivity Stagnation, 2002-2014 (2017)
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