Foreign Competition and Income Distribution in Canada: A Dynamic Microsimulation CGE Model Analysis

Nabil Annabi (), Maxime Fougere and Min Li

International Economic Journal, 2013, vol. 27, issue 4, 525-547

Abstract: In this study we assess the impact of increased foreign competition on labour markets and income distribution in Canada, using a newly developed dynamic microsimulation computable general equilibrium (CGE) model. The main findings of the simulations conducted are that the decline in world prices of imports and exports of the manufacturing products during the 2000s induces small increases in low-income rates and inequality in the short run as well as contractions in the export-oriented manufacturing sectors. In the long run, however, it enhances capital accumulation, particularly in the primary and service sectors, increases real GDP and reduces low-income rates, especially among families with two persons or more.

Date: 2013
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Working Paper: Foreign competition and income distribution in Canada: A dynamic microsimulation CGE Model Analysis (2011)
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DOI: 10.1080/10168737.2012.682077

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