Quelques aspects de la transmission internationale de l’inflation

In the first section, the impact of a shift in international demand on the price level of a small and open economy is analysed in the framework of the IS and LM diagram and under the assumption of a fixed exchange rate; only short run implications are derived from the analysis. In this keynesian context, it is shown, in particular, that the monetary policy implemented by a large country like the U.S. plays an important role in the assessment of the static short run impact of a change in international demand on the price level of a small country like Canada. In the second section of the paper, it is shown that a dynamic version of a keynesian macro model allows the rate of growth of prices of a small country to converge to the "international rate of inflation". In the last section, longer term issues are discussed in the context of the Scandinavian model of inflation. In particular, it is shown that a country like Canada with large regulated and para-public sectors is quite vulnerable to external inflationary shocks

Le marché du travail : quelques perspectives d’avenir

À cause de différents facteurs, la croissance de l’emploi a connu au cours des années 70 un ralentissement moins marqué que celle de la production. La Grande Récession de 1982 est venue bouleverser cette tendance et on ne peut pas encore évaluer tous les effets de cette dernière sur le comportement à moyen terme du marché du travail au Canada. Il est prévisible que la croissance modérée de la production sur la période 1985-1991 s’accompagne d’un relèvement de la progression de la productivité. Il en résultera une progression de l’emploi qui permettra tout juste d’absorber la croissance de l’offre de main-d’oeuvre, de sorte que le taux de chômage oscillera autour de 11 %. L’âge moyen de la population active s’accroîtra dans la prochaine décennie. Cette tendance soulèvera différents problèmes, notamment au niveau du recyclage des travailleurs, mais pourrait aussi permettre un accroissement de la productivité du travail. Seule une accélération de la croissance des investissements privés permettra d’améliorer la situation du marché du travail.Au Québec, à cause de différents facteurs dont certains relèvent de l’orientation de la politique économique du gouvernement provincial, l’évolution du marché du travail a été encore moins favorable qu’au Canada. Les perspectives de croissance ne permettent d’entrevoir aucune amélioration significative des conditions du marché du travail pour les prochaines années et on prévoit que le taux de chômage (mesuré) oscillera autour de 12 % sur la période 1985-1991.In the context of a moderate growth in output and of a rise in the trend of productivity, we forecast that employment and labour force growth will be approximately equal over the 1985-91 period in Canada such that the unemployment rate will fluctuate around an average of 11%. On the other hand, the average age of the labour force will rise in the next ten years and this trend will raise different problems, particularly the re-allocation of the labour force. But it will also allow an improvement of productivity growth. In Quebec, the labour market situation is worse and we do not forecast any significant improvement over the next years. Major economic policy changes will be required to stimulate private investment growth which is the only available way to improve labour market conditions in the future

Le marché du travail : quelques perspectives d’avenir

In the context of a moderate growth in output and of a rise in the trend of productivity, we forecast that employment and labour force growth will be approximately equal over the 1985-91 period in Canada such that the unemployment rate will fluctuate around an average of 11%. On the other hand, the average age of the labour force will rise in the next ten years and this trend will raise different problems, particularly the re-allocation of the labour force. But it will also allow an improvement of productivity growth. In Quebec, the labour market situation is worse and we do not forecast any significant improvement over the next years. Major economic policy changes will be required to stimulate private investment growth which is the only available way to improve labour market conditions in the future. À cause de différents facteurs, la croissance de l’emploi a connu au cours des années 70 un ralentissement moins marqué que celle de la production. La Grande Récession de 1982 est venue bouleverser cette tendance et on ne peut pas encore évaluer tous les effets de cette dernière sur le comportement à moyen terme du marché du travail au Canada. Il est prévisible que la croissance modérée de la production sur la période 1985-1991 s’accompagne d’un relèvement de la progression de la productivité. Il en résultera une progression de l’emploi qui permettra tout juste d’absorber la croissance de l’offre de main-d’oeuvre, de sorte que le taux de chômage oscillera autour de 11 %. L’âge moyen de la population active s’accroîtra dans la prochaine décennie. Cette tendance soulèvera différents problèmes, notamment au niveau du recyclage des travailleurs, mais pourrait aussi permettre un accroissement de la productivité du travail. Seule une accélération de la croissance des investissements privés permettra d’améliorer la situation du marché du travail.

La prévision de l’emploi dans le modèle de l’IRIC

Final demand determines output in commercial non agricultural industries (Q). Employment is linked to Q by a distributed lag mechanism. In turn employment has an impact on other parts of model. In particular employment appears as a determinant of the labour supply and of the distribution of income. The latter is closely related to the structure of final demand. Hence, employment is a key-variable when one uses the model to make a forecasting exercise.Some of the principles behind the specification and estimation of the model are discussed. For example, for forecasting purposes one must limit the size of the model. Although the specification of each equation is derived from the body of accepted macro-economic theory, the limited size of the model and the necessity to obtain data at the time a forecast is made impose some constraint on the specification of the equations.In the short run, actual employment is not immediately adjusted to the level of desired employment, i.e., employment level that could minimize production costs. The quarterly changes in employment are then made proportional to the gap between desired and actual employment. Desired employment is obtained by using an inverse production function. However, the adjustment mechanism is not stable over the cycle. Various proxy variables could be used to unbody that phenomenon into the equation. The ratio of actual to potential output and the relative change in the gap between actual and potential output are combined to make an indicator of the degree of slackness or tension in the economy over the cycle. This indicator is introduced into the final specification of the equation. The equation estimated is consistent with economic theory and gives excellent forecasting results.However the severe recession of 1974 was accompanied by an exceptional drop in productivity that could be entirely captured by the equation and some adjustments were needed to forecast employment for that particular period

Le comportement des salaires chez les travailleurs syndiqués de l’industrie de la construction au Canada

In this paper, we analyze the behaviour of wages of the unionized workers of the construction industry in Canada. We compare the behaviour of construction wages to those observed in the sectors exposed to and protected from international competition. One conclusion of our analysis is that the construction sector is by far the most inflationnary sector of the Canadian economy. Union power in the construction industry combined with the control of labour supply by skilled trades associations in a market which lends itself to bilateral oligopoly can thus lead to wage increases in the construction sector which in the current inflationnary context exceed those in all other sectors of the economy. This situation is possible because construction firms do not have to face the threat of international competition. The result of this situation is to reduce the level of activity and employment in the construction sector. In addition, the mechanism for fixing wages serves to accentuate the cyclical fluctuations in the construction sector

Quelques perspectives de la conjoncture au cours des prochaines années (revues et corrigées)

In this paper, we examine some of the factors that will have a major effect onthe economic cycle in the next few years. In particular, the impact of deflation,energy prices, capital costs and government deficits on income and expendituresbehaviour is discussed

Un modèle de la détermination des salaires dans l’industrie de la construction au Québec

The provincial decree applying to the construction industry in Quebec has created a situation of bilateral monopoly in that segment of the labor market (unions on the supply side and entrepreneurs on the demand side). If negotiations are undertaken at a time where business conditions are booming, then the unions have a very powerful negotiating power. Since contracts are signed for a three year period, wage increases do not afterwards reflect market conditions. Since wages are fixed by the provincial decree, there is then a quantity adjustment in the construction sector. In this paper, we have specified and estimated a model that allows us to measure the bilateral monopoly impact of wage increases and to compute quantity adjustments in the construction market. It is shown then that the provincial decree adversily affects the competition position of the construction industry in Quebec and that restauring this position involves a severe recession in the construction industry