The Canada-US Productivity Growth Paradox: an Economic or a Statistical Puzzle?
Productivity data on the business sector, which covers around 75% of the economy, provide important information on the evolution of living standards. The data on multifactor productivity (MFP) growth and labor productivity growth produced by the official statistical agency in Canada (Statistics Canada) and the US (the Bureau of Labor Statistics, or the BLS) send mixed signals regarding the comparative evolution of living standards in the two countries. Since the early 1980s Statistics Canada's MFP growth measures for the business sector indicate that the Canadian economy has outperformed the US economy while labour productivity data produce a reverse picture. This is the Canada-US Productivity Paradox. In this study, we investigate the Productivity Paradox with an analysis of Canadian and US business sector productivity data since 1961.
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