Productivity and Trade Liberalizations in Canada

Loris Rubini

Economics Bulletin, 2015, vol. 35, issue 2, 1404-1422

Abstract: I study the evolution of productivity in Canada relative to the United States during two trade liberalization episodes: the 1965 Auto Pact and the 1989 Free Trade Agreement. I find that Canada´s productivity grew more than U.S. productivity in the liberalized sector, which is consistent with the idea that openness increases productivity. This study reveals new evidence of productivity during the Auto Pact. Regarding the Free Trade Agreement, existing studies find that manufacturing productivity grew less in Canada than in the United States following the agreement. I argue that this is due to the use of prices that are not comparable across countries. Once these prices are made comparable, my findings are that manufacturing productivity grew more in Canada than in the U.S. The results of this study suggest there are productivity gains associated with trade liberalization, and models of international trade should account for them.

Keywords: Auto Pact; US - Canada Free Trade Agreement; Productivity Gains from Trade. (search for similar items in EconPapers)
JEL-codes: F1 F4 (search for similar items in EconPapers)
Date: 2015-06-09
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2015/Volume35/EB-15-V35-I2-P141.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-14-00956

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().