Real GDP and the Purchasing Power of Provincial Output
Economic Analysis (EA) Research Paper Series from Statistics Canada, Analytical Studies Branch
This paper examines the impact of import and export price changes on economic welfare in Canada, and in each of the provinces. It examines how terms of trade shifts and fluctuations in the ratio of traded to non-traded goods prices affect the purchasing power of domestic production. Terms of trade shifts are shown to have a larger impact in the short-run. Moreover, the paper shows that failing to account for terms of trade shifts, when analysing macroeconomic data, can lead to misinterpretations about the sources of growth or decline in consumption, investment and imports. The magnitude and direction of terms of trade fluctuations, and their impacts, vary by province and over time. Changes in commodity prices are shown to have important effects. The effect of terms of trade shifts is largest in Alberta and Newfoundland and Labrador, while Manitoba is relatively unaffected.
Keywords: International trade; Economic accounts; Gross domestic product; Income and expenditure accounts (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:stc:stcp5e:2007046e
Access Statistics for this paper
More papers in Economic Analysis (EA) Research Paper Series from Statistics Canada, Analytical Studies Branch Contact information at EDIRC.
Bibliographic data for series maintained by Mark Brown ().