Category Productivity
Human capital: literal truth, fairy tale or myth?
This is from my Carleton colleague Frances Woolley: Part I: Education Every undergraduate student in labour economics gets told the story of human capital. Education and experience make people more productive. The skills so acquired are called “human capital.” This explains why some people earn more than others, and why some countries are […]
Putting the foreign-ownership cart ahead of the innovation horse
David Olive gets things wrong in his column today. Foreign ownership is not to blame for low levels of productivity and innovation in Canada. A 2005 StatsCan study (pdf) found that "foreign-controlled plants are more productive than domestic-controlled plants" and "are also more innovative, more R&D intensive and use more advanced technologies." Protecting domestic managers […]
Economic nationalism is the last refuge of incompetent managers
At one point during the coverage of last Thursday's budget, Allan Gregg suggested that some of the measures – liberalizing the telecoms market, tariff cuts – would bring economic nationalism back to the public agenda (my immediate reaction). And today, Jeffrey Simpson is talking about the perils of the 'branch plant economy'.
Of horses and men
As a teenager I read Kurt Vonnegut's novel Player Piano. It's stuck in my economist's mind ever since. It describes life in the near-future when technology and machines have destroyed the demand for nearly all human labour, except for the labour of a small, highly-educated minority. The vast majority of the population would be unemployed, […]
Demographic change isn’t a long-term problem any more
It's now a short-term problem. I spent the morning doing interviews on CBC radio morning shows in Corner Brook, Victoria and nine places in between. (For those of you who caught it, yes, I really do speak that quickly. I try to slow down when I'm on the air, but sometimes I forget.) One of […]
“Dispelling Canadian myths about foreign direct investment”
That's the title of a nice survey for the Institute for Research on Public Policy by Walid Hejazi, available here. After being a hot-button topic for the past half-century or so (note to non-Canadians: yes, really), FDI has accumulated a thick crust of myths that could do with some dispelling: The debate around foreign direct […]
Productivity: The demographic tipping-point
Real, per-capita GDP growth has averaged about 1.7% in Canada over the past 30 years – where has it come from? A less-than-exhaustive but more-than-cursory examination of the data suggests the following breakdown: Source Contribution Technical progress: 0.9% Capital deepening: 0.5% Decrease in hours worked per week: -0.2% Increase in employment rate: 0.25% Increase in […]
Hardball, lowball and the allocation of Nortel’s assets
Paul Wells directs our attention to a piece by Roger Martin – of U of T's Rotman School of Management – in the Globe and Mail: Bankrupt Nortel Networks Corp. is auctioning off its assets to pay what it can to creditors. A key component of those assets is valuable intellectual property related to the […]
The optimal number of things to think about
I think our minds (brains, whatever) are like a multi-product firm. We have to decide how many things to think about — how many different products to produce. We don't think about just one thing all the time; but we don't think about an infinite number of things either. There must be fixed costs of […]
“Canada’s managers are under-achievers”
Dan Trefler gave the Innis Lecture at the meetings of the Canadian Economics Association in Vancouver a couple of weeks ago. The title of his talk was "Policies for Canadian Prosperity"; inevitably, one of the points he spent a lot of time on was the problem of Canada's slow rate of productivity growth. One possible […]
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