Trade integration
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Weakness in Non-Commodity Exports: Demand versus Supply Factors
We use the Terms-of-Trade Economic Model (ToTEM) to conduct demand- and supply-driven simulations, both of which deliver weakness in Canadian non-commodity exports relative to foreign activity in line with recent data. -
What Is Restraining Non-Energy Export Growth?
This note summarizes the key findings from Bank of Canada staff analytical work examining the reasons for the recent weakness in Canadian non-energy exports. Canada steadily lost market share in US non-energy imports between 2002 and 2017, mostly reflecting continued and broad-based competitiveness losses. -
Canada’s Experience with Trade Policy
This paper compiles the contemporary view on three major Canadian-led trade policies that have marked Canada’s economic history since Confederation: the National Policy (1879), the Canada–US Agreement on Automotive Products (Auto Pact, 1965) and the Canada–US Free Trade Agreement (FTA, 1989, including its extension to the North American Free Trade Agreement, NAFTA, 1994). -
Capital-Goods Imports and US Growth
Capital-goods imports have become an increasing source of growth for the U.S. economy. To understand this phenomenon, we build a neoclassical growth model with international trade in capital goods in which agents face exogenous paths of total factor and investment-specific productivity measures. -
September 18, 2017
How Canada’s International Trade is Changing with the Times
Deputy Governor Timothy Lane discusses the changing nature of international trade and the factors that are propelling it. -
The Welfare Effects of Protection: A General Equilibrium Analysis of Canada’s National Policy
In this paper, we study the impact of Canada’s adoption of protectionist trade policy in 1879 on Canadian welfare. Under the National Policy the Canadian average weighted tariff increased from 14% to 21%. The conventional view is that this was a distortionary policy that negatively affected Canadian welfare. -
May 4, 2017
Canada and Mexico: Common Issues in Uncommon Times
Governor Stephen S. Poloz discusses how shared economic traits leave Canada and Mexico well placed to face global challenges. -
Vertical Specialization and Gains from Trade
Multi-stage production is widely recognized as an important feature of the modern global economy. This feature has been incorporated into many state-of-the-art quantitative trade models, and has been shown to deliver significant additional gains from international trade. -
Accounting for Real Exchange Rates Using Micro‐Data
The classical dichotomy predicts that all of the time-series variance in the aggregate real exchange rate is accounted for by non-traded goods in the consumer price index (CPI) basket because traded goods obey the Law of One Price. In stark contrast, Engel (1999) claimed the opposite: that traded goods accounted for all of the variance.