The Complex Adjustment of the Canadian Economy to Lower Commodity Prices

Julien Champagne, Nikita Perevalov, Hope Pioro, Dany Brouillette and Andrew Agopsowicz

Staff Analytical Notes from Bank of Canada

Abstract: In this analytical note, we provide a comprehensive assessment of the complex structural adjustment facing the Canadian economy following the commodity price decline since mid-2014. We quantify separately the impacts coming from the commodity sector restructuring and the broader effect of significantly lower terms of trade. Based on our analysis, the impact on the Canadian economy will occur in three phases. By the end of phase 3, in 2020, the level of Canadian GDP will be 2 per cent lower due to the commodity price decline than it otherwise would have been had commodity prices stayed at the mid-2014 level. At this point, the commodity sector is expected to play a smaller role in the Canadian economy.

Keywords: Business fluctuations and cycles; Exchange rates; Labour markets; Potential output; Recent economic and financial developments (search for similar items in EconPapers)
JEL-codes: E17 E27 E52 J2 Q00 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.bankofcanada.ca/wp-content/uploads/2016/01/san2016-1.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:bca:bocsan:16-1

Access Statistics for this paper

More papers in Staff Analytical Notes from Bank of Canada 234 Wellington Street, Ottawa, Ontario, K1A 0G9, Canada. Contact information at EDIRC.
Bibliographic data for series maintained by ().