Relative Prices, Trading Gains, and Real GDI: The Case of Canada
AbstractTreating imports as intermediate inputs to domestic production, the author adopts the translog function approach to model real gross domestic income (GDI) in Canada over the 1961-2006 period. She explores the role of price ratios, such as terms of trade and the real effective exchange rate, in explaining changes in real GDI, trade openness, trade balance, and labour share of income, after controlling for factor endowments and technological improvements. Models are developed for both the total economy and the business sector, with alternative assumptions about the flexibility of labour input, user cost of capital, and the representation of technological changes.
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Bibliographic InfoPaper provided by Bank of Canada in its series Discussion Papers with number 09-4.
Length: 38 pages
Date of creation: 2009
Date of revision:
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Productivity; Econometric and statistical methods;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
- D33 - Microeconomics - - Distribution - - - Factor Income Distribution
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