Any number of analysts – including me – have noted that 25% of Canadian output is  exported to the US. So it's natural to conclude that a reduction in economic activity in the US will reduce the demand for Canadian goods, and that this would in turn induce a reduction of economic activity in Canada. […]

July’s auto sales numbers in the US: WSJ – Auto Sales Sink, With Big Three Hit Worst: The downtrend again hit a wide swath of auto makers, with the Big Three taking the brunt of it. GM, on the same day it posted a $15.5 billion quarterly loss, reported that its sales of cars and […]

The May GDP numbers are out, and we’re still below the level observed in November of last year. But can we call it a recession? If we do, we’d have to call it a 21st-century recession: it looks a lot like what we saw in 2001-2, but not much like we’d seen before. Here are […]

The balance of payments data were revised with the release of the 2008Q1 numbers, and something very important happened back in 2006 – estimates for Canada’s net international investment position went positive: The sharp appreciation of the Canadian dollar during 2007 reduced the value (in CAD terms) of foreign holdings, but the precedent has finally […]

Since 2002, we’ve been seeing a pattern in which periods of CAD appreciation alternate with periods where the trade balance increases: The cycle goes something like this: When the trade balance is high, the CAD appreciates. The appreciation brings the trade balance down, and the CAD hits a plateau. While the CAD is plateaued, the […]