Skip to main content
Article thumbnail
Location of Repository

The Effects of Recent Relative Price Movements on the Canadian Economy

By David Dupuis and Philippe Marcil


Although the standard of living of Canadians has improved as a result of terms-of-trade gains created by the sharp rise in real commodity prices over the past five years or so, the commodity-price increase, combined with an exchange rate appreciation and real income gain, triggered structural adjustments by altering underlying economic incentives. The frictions generated in adjusting to the relative price shock have likely contributed to hold back aggregate productivity growth. Dupuis and Marcil examine the structural adjustments that have been required-in particular, the resource reallocation among the different sectors of the economy-and its effects on employment, output, and productivity, as well as the responses of final domestic demand and external trade flows.

OAI identifier:

Suggested articles


  1. (1996). Adjustment Costs in Factor Demand.”
  2. (2007). Canadian and U.S. Real Income Growth Pre and Post 2000: A Reversal of Fortunes.” Statistics Canada-Economic Analysis ResearchPaper SeriesCatalogueNo.11F0027MIE–
  3. (2005). Exports, Imports, and the Appreciation of the Canadian Dollar.” Bank of Canada Review (Autumn):
  4. (2001). Is There a Case for Exchange-RateInduced Productivity Changes?” In Revisiting the Case for Flexible Exchange Rates,
  5. (2006). Productivity, Terms of Trade, and Economic Adjustment." Remarks by Pierre Duguay, Deputy Governor of the Bank of Canada, to the Canadian Association for Business Economics,
  6. (1977). Recent Growth in Productivity, Real Expenditure per Capita and Real Income per Capita: Accounting for the Differences.” Bank of Canada Review
  7. (2000). Technological Progress, Structural Change and Productivity Growth:
  8. (1993). Terms-of-Trade Shocks, Real Exchange Rate Adjustment, and Sectoral and Aggregate Dynamics.”
  9. (2005). What Drives Movements in Exchange Rates?” Bank of Canada Review (Autumn):

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.