Canada's Potential Growth: Another Victim of the Crisis?

This study investigates the impact of the current financial crisis on Canada''s potential GDP growth. Using a simple accounting framework to decompose trend GDP growth into changes in capital, labor services and total factor productivity, we find a sizeable drop in Canadian potential growt...

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1. Verfasser: Estevão, Marcello M. (VerfasserIn)
Format: Elektronisch E-Book
Sprache:English
Veröffentlicht: Washington, D.C International Monetary Fund 2010
Schriftenreihe:IMF Working Papers Working Paper No. 10/13
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Zusammenfassung:This study investigates the impact of the current financial crisis on Canada''s potential GDP growth. Using a simple accounting framework to decompose trend GDP growth into changes in capital, labor services and total factor productivity, we find a sizeable drop in Canadian potential growth in the short term. The estimated decline of about 1 percentage point originates from a sharply decelerating capital stock accumulation (as investment has dropped steeply) and a rising long-term unemployment rate (which would raise equilibrium unemployment rates). However, over the medium term, we expect Canada''s potential GDP growth to gradually rise to around 2 percent, below the pre-crisis growth rate, mostly reflecting the effects of population aging and a secular decline in average working hours
Beschreibung:1 Online-Ressource (29 p)
ISBN:1451962045
9781451962048

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