Shadow banking: accounting for Canada's productivity gap

Purpose - The paper's purpose is to show that the reported (and growing) labour productivity gap between the G7 and OECD countries and the USA might be a factor of the rapid adoption of shadow banking structures and techniques in the USA versus the adoption of those structures in OECD and G7 economies. Design/methodology/approach - The paper explains the concept and practice of shadow banking and explores the ways in which the various conventions adopted distort reported productivity figures. Findings - The growing adoption of shadow banking over the period 1974‐2007 has had the effect of increasing the metrics for labour productivity over the same period. Practical implications - It is clear that those who wish to understand the apparent growing gap between labour productivity of the USA and other G7/OECD nations must look beyond the simple reported figures to identify the ways in which figures are calculated and reported. Originality/value - The paper shows that reporting of figures to established conventions can be affected by a range of factors, not apparent from looking at those conventions themselves.