Canada's Potential Productivity and Output Growth: A Post-Crisis Assessment

Marcello Estevão and Evridiki Tsounta ()

International Productivity Monitor, 2010, vol. 20, 3-21

Abstract: This study investigates the impact of the current financial crisis on Canada’s potential GDP growth. Using a simple accounting framework to decompose trend GDP growth into changes in capital, labour services, and total factor productivity, we find a sizeable drop in Canadian potential growth rate in the short term. The estimated decline of about 1 percentage point originates from a sharply decelerating capital stock accumulation (as investment has dropped steeply). However, over the medium term, we expect Canada’s potential GDP growth to gradually rise to around 2 per cent, below the pre-crisis growth rate, partly reflecting the effects of population aging.

Keywords: productivity; potential output; growth; Canada (search for similar items in EconPapers)
JEL-codes: D24 E32 J24 O47 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (2)

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