Op-Eds
In the United States and around the world, millions of people are now asking “how could this happen?” How can we make sense of an America in which Donald Trump becomes the next president? Discovering the real answer to this question will be good for America—and for Canada, too.
Many people who are now angry and perplexed focus on Donald Trump, the man. They argue that he is the real problem America now faces—that he is not temperamentally capable of being president and that he cannot be trusted in the White House. Those skeptical of this view point out that Mr. Trump may surround himself with knowledgeable people and that the famous checks and balances in the U.S. system of government will prevent him from doing crazy things.…
The Canadian economy faces serious growth headwinds over the next few decades, and policy makers across the country should be thinking hard about how to improve growth. Many policy options will likely be considered, but finance ministers will soon find that there are no quick fixes. Economic growth is a complex process.
The broadest measure of average income is per capita gross domestic product (GDP), which is simply the overall national income divided by the number of people. Over long periods of time, this measure grows for two reasons: improvements in labour productivity and increases in the labour force participation rate.
Since 1970, per capita GDP in Canada has increased at an average rate of 1.3 per cent a year –…
By Craig Alexander
The precipitous decline in the Canadian dollar has come as a shock to many businesses. Only a few years ago, forecasters were telling them to come to terms with a currency at par for the foreseeable future. Now, the Canadian dollar is worth close to 75 cents (U.S.) and could fall further. This is welcome news for the near-term economic outlook – the benefits to exporters will exceed the cost to importers, boosting economic growth. This demonstrates the value of Canada’s flexible exchange rate regime that acts as a buffer when economic shocks occur, such as the recent tumble in commodity prices. However, there is a potential dark side to a sustained low-valued loonie, as it can erode productivity and dampen…
By Stephen Gordon
Most people probably think of the debate over whether Canada is in a recession as one of those glass-half-full versus glass-half-empty things. Pessimists look at five months of declining GDP and call it a “recession,” while optimists look at increasing employment and say that we’re not in a recession. Yet, the real pessimists are the ones saying we’re not in recession.
Making the case that we’re in a recession is basically optimistic: the problems we’re currently experiencing in the economy will be over soon (if it’s not already) and all that is needed it for policymakers to employ the usual array of countercyclical policies. The “no recession” camp is the home of the pessimists: saying that we’re not in…
By Steve Ambler and Jeremy Kronick
Statistics Canada’s release of preliminary merchandise trade figures for June may provide some closure to the debate on Canada’s so-called recession. After a 4-per-cent fall in export volumes over the first five months of 2015, Canada’s sales to foreigners came roaring back, with a 4.8-per-cent increase in June alone. Imports also decreased in volume by 0.9 per cent from May to June.
Overall Canadian economic growth in the first quarter of 2015, as well as the first two months of the second quarter, was negative. The decline in the value of the Canadian dollar in the wake of falling world oil prices had been expected to boost the growth of most other exports, but until June, the…
