IDEAS home Printed from
   My bibliography  Save this article

Real GDP, Real GDI and Trading Gains: Canada, 1981-2005


  • Ulrich Kohli


Real gross domestic product (GDP) fails to account for the trading gains and losses that result from changes in the terms of trade and in the real exchange rate (the price of tradables relative to the price of nontradables). Canada has enjoyed vast improvements in its terms of trade over recent years and there is a growing suspicion that real GDP has done an inadequate job at reflecting the resulting increases in real value added and real gross domestic income (GDI). Superlative measures of the terms of trade and real exchange rate effects confirm this view, with the trading gains adding up to 4.8 per cent of GDP between 2002 and 2005.

Suggested Citation

  • Ulrich Kohli, 2006. "Real GDP, Real GDI and Trading Gains: Canada, 1981-2005," International Productivity Monitor, Centre for the Study of Living Standards, vol. 13, pages 46-56, Fall.
  • Handle: RePEc:sls:ipmsls:v:13:y:2006:4

    Download full text from publisher

    File URL:
    Download Restriction: no

    File URL:
    File Function: version en français
    Download Restriction: no

    References listed on IDEAS

    1. Burgess, David F., 1974. "Production theory and the derived demand for imports," Journal of International Economics, Elsevier, vol. 4(2), pages 103-117, May.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Alan Ross Hall, 2018. "International Trade, Real GDP, the Terms of Trade, and the Australian Economy 2011 to 2017," Economic Papers, The Economic Society of Australia, vol. 37(3), pages 220-229, September.
    2. Nicholas Oulton, 2019. "GDP is a measure of output, not welfare. Or, HOS meets the SNA," Economic Statistics Centre of Excellence (ESCoE) Discussion Papers ESCoE DP-2019-06, Economic Statistics Centre of Excellence (ESCoE).
    3. W. Erwin Diewert & Emily Yu, 2012. "New Estimates of Real Income and Multifactor Productivity Growth for the Canadian Business Sector, 1961-2011," International Productivity Monitor, Centre for the Study of Living Standards, vol. 24, pages 27-48, Fall.
    4. Idrisov, Georgiy (Идрисов, Георгий) & Ponomarev, Yuriy (Пономарев, Юрий) & Sinelnikov-Murylev, Sergei (Синельников-Мурылев, Сергей), 2015. "Terms of trade and economic development of modern Russia [Условия Торговли И Экономическое Развитие Современной России]," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 3, pages 7-37.
    5. Wolfgang Nierhaus & Timo Wollmershäuser, 2016. "ifo Konjunkturumfragen und Konjunkturanalyse: Band II," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 72, October.
    6. Diewert, Erwin & Mizobuchi, Hideyuki, 2009. "An Economic Approach to the Measurement of Productivity Growth Using Differences Instead of Ratios," Economics working papers erwin_diewert-2009-2, Vancouver School of Economics, revised 09 Jan 2009.
    7. Macdonald, Ryan, 2007. "Not Dutch Disease, It's China Syndrome," Insights on the Canadian Economy 2007017e, Statistics Canada, Economic Analysis Division.
    8. Marshall B. Reinsdorf, 2010. "Terms Of Trade Effects: Theory And Measurement," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(s1), pages 177-205, June.
    9. Idrisov, Georgy & Ponomarev, Yury & Sinelnikov-Murylev, Sergey, 2016. "Terms of trade and Russian economic development," Russian Journal of Economics, Elsevier, vol. 2(3), pages 279-301.
    10. Diewert, Erwin, 2008. "Changes in the Terms of Trade and Canada's Productivity Performance," Economics working papers diewert-08-03-11-11-03-49, Vancouver School of Economics, revised 18 Jul 2008.
    11. Michael Siegenthaler, 2015. "Has Switzerland Really Been Marked by Low Productivity Growth? Hours Worked and Labor Productivity in Switzerland in a Long-run Perspective," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(2), pages 353-372, June.
    12. Shutao Cao & Sharon Kozicki, 2017. "Real GDI, Productivity, and the Terms of Trade in Canada," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63, pages 134-148, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Christis G. Tombazos, 2010. "Trade and Wage Inequality in a World of Incomplete Diversification," Chapters, in: Noel Gaston & Ahmed M. Khalid (ed.), Globalization and Economic Integration, chapter 8, Edward Elgar Publishing.
    2. Enno Schröder, 2020. "Offshoring, employment, and aggregate demand," Journal of Evolutionary Economics, Springer, vol. 30(1), pages 179-204, January.
    3. Das, Sandwip Kumar, 1997. "India's rupee devaluation, trade balance and unemployment: A producer theory approach," Journal of Asian Economics, Elsevier, vol. 8(1), pages 51-66.
    4. Muhammad, Andrew, 2008. "The Role of the Imports for Re-Exports Program in Determining Canadian Demand for Imported Cheese: Implications for U.S. Exports," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 8214, Southern Agricultural Economics Association.
    5. Mauro Caselli & Arpita Chatterjee & Alan Woodland, 2017. "Multi-product exporters, variable markups and exchange rate fluctuations," Canadian Journal of Economics, Canadian Economics Association, vol. 50(4), pages 1130-1160, November.
    6. Huy Quang Vu, 2012. "Imports and the demand for skilled and unskilled labour - the Australian experience," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 15(1), pages 37-55.
    7. Jones, Rodney & Purcell, Wayne & Driscoll, Paul & Peterson, Everett, 1996. "Issues and Cautions in Employing Behavioral Modeling Approaches to Test for Market Power," Staff Papers 232517, Virginia Polytechnic Institute and State University, Department of Agricultural and Applied Economics.
    8. Claudio Sfreddo, 2004. "International-price and terms-of-trade effects on factor productivity: international comparisons," International Trade 0408002, University Library of Munich, Germany, revised 07 Sep 2004.
    9. Lila J. Truett & Dale B. Truett, 2009. "Challenges For France In The Emerging International Environment: A Dynamic Analysis," Contemporary Economic Policy, Western Economic Association International, vol. 27(4), pages 566-573, October.
    10. Eric Wang, 1998. "Sensitivities of Import Demand and Export Supply in an Open Developing Economy: the Evidence from Taiwan, 1961-1994," International Economic Journal, Taylor & Francis Journals, vol. 12(1), pages 121-139.
    11. Muhammad, Andrew, 2006. "Measuring the Degree of Monopsony Power in the EU Fish Importing Industry: Implications for Ugandan Fresh and Chilled Fish Fillet Exports," 2006 Annual Meeting, February 5-8, 2006, Orlando, Florida 35455, Southern Agricultural Economics Association.
    12. Diewart, W Erwin & Morrison, Catherine J, 1986. "Adjusting Output and Productivity Indexes for Changes in the Terms of Trade," Economic Journal, Royal Economic Society, vol. 96(383), pages 659-679, September.
    13. Truett, Lila J. & Truett, Dale B., 2003. "A cost function analysis of import demand and growth in South Africa," Journal of Development Economics, Elsevier, vol. 70(2), pages 425-442, April.
    14. Byron Gangnes & Ari Van Assche, 2016. "Global Value Chains and Changing Trade Elasticities," Working Papers 201617, University of Hawaii at Manoa, Department of Economics.
    15. Feleke, Shiferaw T. & Walters, Lurleen M., 2005. "Global Coffee Import Demand in a New Era: Implications for Developing Countries," Review of Applied Economics, Lincoln University, Department of Financial and Business Systems, vol. 1(2), pages 1-15.
    16. Washington, Andrew A. & Kilmer, Richard L., 2002. "The Production Theory Approach to Import Demand Analysis: A Comparison of the Rotterdam Model and the Differential Production Approach," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 34(3), pages 431-443, December.
    17. Boyd, Richard H. & Schmidt, Stephen C., 1986. "Price Competition Between Imported Wheat • Varieties in the Japanese Market," 1986 Annual Meeting, July 27-30, Reno, Nevada 278161, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Emmanuel Egbe, 1991. "Agricultural exports and the agenda for accelerated development in Africa," The Review of Black Political Economy, Springer;National Economic Association, vol. 20(2), pages 65-87, December.
    19. Lila J. Truett & Dale B. Truett, 2011. "Whither Germany and the EMU In a Challenging Environment?," Working Papers 0019, College of Business, University of Texas at San Antonio.
    20. Alexander Hijzen, 2004. "Trade in Intermediates and the Rise in Wage Inequality in the UK: A GNP Function Approach," Econometric Society 2004 North American Summer Meetings 224, Econometric Society.

    More about this item


    Real GDP; Trade; Real exchange rate; Real GDI; Measurement on GDP;
    All these keywords.

    JEL classification:

    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sls:ipmsls:v:13:y:2006:4. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CSLS The email address of this maintainer does not seem to be valid anymore. Please ask CSLS to update the entry or send us the correct address (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.