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Economic Growth in Canada and the United States: Supply-Push or Demand-Pull?

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  • Jianmin Tang
  • Weimin Wang

Abstract

type="main"> Understanding the nature of structural change and the sources of economic growth of an economy, especially the relative importance of different industries, is essential for policy-making. This paper estimates industry contribution to economic growth in both Canada and the United States. It argues that industry contribution should be evaluated on the basis of the performance of an industry in terms of creating economic value relative to other industries. In particular, it calls for the quantity and the price effects, which is consistent with real GDP in the chained-Fisher index that values the industry more when its price rises and less when its price declines. This is an important departure from the traditional methodologies that consider only quantity effect. This paper shows that the contribution from demand-driven industries is significantly more than the finding based on traditional thinking.

Suggested Citation

  • Jianmin Tang & Weimin Wang, 2015. "Economic Growth in Canada and the United States: Supply-Push or Demand-Pull?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(4), pages 773-798, December.
    • Handle: RePEc:bla:revinw:v:61:y:2015:i:4:p:773-798
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    File URL: http://hdl.handle.net/10.1111/roiw.12139
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    References listed on IDEAS

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    1. Ark, Bart van & Timmer, Marcel & Inklaar, Robert, 2002. "The Canada-U.S. manufacturing productivity gap revisited: new ICOP results," GGDC Research Memorandum 200251, Groningen Growth and Development Centre, University of Groningen.
    2. Jianmin Tang & Weimin Wang, 2004. "Sources of aggregate labour productivity growth in Canada and the United States," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 37(2), pages 421-444, May.
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    6. Jianmin Tang & Henrique Do Livramento, 2010. "Offshoring And Productivity: A Micro‐Data Analysis," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(s1), pages 111-134, June.
    7. Jianmin Tang & Someshwar Rao & Min Li, 2010. "Sensitivity of Capital Stock and Multifactor Productivity Estimates to Depreciation Assumptions: A Canada-U.S. Comparison," International Productivity Monitor, Centre for the Study of Living Standards, vol. 20, pages 22-47, Fall.
    8. Michael-John Almon & Jianmin Tang, 2011. "Industrial Structural Change and the Post-2000 Output and Productivity Growth Slowdown: A Canada-U.S. Comparison," International Productivity Monitor, Centre for the Study of Living Standards, vol. 22, pages 44-81, Fall.
    9. Diewert, Erwin, 2008. "On the Tang and Wang Decomposition of Labour Productivity Growth into Sectoral Effects," Economics working papers erwin_diewert-2008-6, Vancouver School of Economics, revised 16 Apr 2008.
    10. Ricardo de Avillez, 2012. "Sectoral Contributions to Labour Productivity Growth: Does the Choice of Decomposition Formula Matter?," CSLS Research Reports 2012-09, Centre for the Study of Living Standards.
    11. Dale W. Jorgenson & Mun S. Ho & Kevin J. Stiroh, 2005. "Growth of US Industries and Investments in Information Technology and Higher Education," NBER Chapters, in: Measuring Capital in the New Economy, pages 403-478, National Bureau of Economic Research, Inc.
    12. Kelvin Ka Yin Chan & Wulong Gu & Jianmin Tang, 2012. "Industry Mix, Plant Turnover and Productivity Growth: A Case Study of the Electronic and Electrical Product Manufacturing," Transnational Corporations Review, Ottawa United Learning Academy, vol. 4(1), pages 11-37, March.
    13. Weimin Wang, 2014. "Foreign Multinational Production in Canadian Manufacturing Sector," Transnational Corporations Review, Ottawa United Learning Academy, vol. 6(1), pages 26-41, March.
    14. repec:dgr:rugggd:200251 is not listed on IDEAS
    15. Jianmin Tang, 2010. "Offshoring: A Canadian Story," Transnational Corporations Review, Ottawa United Learning Academy, vol. 2(4), pages 51-58, December.
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    Cited by:

    1. Zhao, Jingfeng & Tang, Jianmin, 2018. "Understanding agricultural growth in China: An international perspective," Structural Change and Economic Dynamics, Elsevier, vol. 46(C), pages 43-51.
    2. Wei Wei & Jianmin Tang, 2019. "Ownership transformation, firm performance and manufacturing growth in China," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 27(2), pages 475-496, February.
    3. Zhao, Jingfeng & Tang, Jianmin, 2018. "Industrial structure change and economic growth: A China-Russia comparison," China Economic Review, Elsevier, vol. 47(C), pages 219-233.

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