Category Productivity
Is Ontario in Decline?
With a battered manufacturing sector, a large public sector deficit, a drop in per capita GDP relative to other provinces and becoming a recipient of equalization, Ontario has definitely seen better days. The question is whether this is represents a long-term trend towards economic decline for Ontario or is it simply a short-term aberration?
Cyclical productivity growth and the manufacturing sector
This post was written by Simon van Norden of HEC-Montréal. Here is a quick graph from FRED of US economy-wide vs manufacturing employment growth: One of the questions that I've had is whether the more rapid productivity growth in aggregate was the result of (a) faster productivity growth across lots of sectors, or (b) concentrating […]
Partial vs General equilibrium lumps of labour
Does an increase in productivity cause labour demand to increase or decrease? The answer to that question, and how we go about answering it, depends on whether we are talking about one small sector of the economy (partial equilibrium), or the economy as a whole (general equilibrium). (I was doing general equilibrium in my previous […]
Productivity, labour demand, and employment
This topic has come up a couple of times in comments on previous posts. Suppose there's an increase in labour productivity. Maybe because of improved technology. How will that affect labour demand, and employment? I'm just going to work through the absolutely standard long-run classical textbook analysis of this question, with the help of a […]
Spain, Ireland, and the US. All breaking Okun’s Law.
In my last post I noted that the US was abnormal in comparison to the other G7 countries. In all the other countries GDP fell by more than employment, so labour productivity fell. That's what normally happens in a recession. Okun's Law says so. But US GDP fell by less than employment, so labour productivity […]
How does an appreciating Canadian dollar prevent improvements in innovation?
Dan Trefler's op-ed in Saturday's Globe and Mail had this passage: Do we want to be an innovation-based economy? Or do we want to be a resource-based economy? Unfortunately, we can’t be both. The loonie won’t let us. Why can't we be both?
Productivity and real wages revisited
Before the recession hit, the overriding concern for the Canadian macroeconomy was our poor record of productivity growth. As the recovery progresses, we can expect this discussion to move back to the forefront of policy debates. When we talk about the importance of productivity, the point is invariably made that increasing output per worker is […]
Approaching the end of the Canadian recovery: Time to worry about productivity
After a decent string of strong numbers, the most recent data releases are pretty tepid. It would appear that the days of recovery are coming to an end.
Are we hard-wired for capitalism?
When I get back from the Canadian Economics Association meetings this evening, my dog will throw himself on me in a paroxysm of joy. But if, two minutes later, I were to try to take a bone away from him, he would bare his teeth and growl. Animals – including humans – are instinctively possessive. […]
Productivity, the Canadian Dollar and Small Business – A Case Study
Based on a true story one of my clients had to deal with (besides teaching at Ivey, I am a consultant to the chemical industry). The following case explains why there could be, at least in theory, a relationship between productivity levels and fluctuations in the Canadian dollar. Consider a small company in Brampton that […]
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