Government of Canada

About: Government of Canada is a government organization based out in Ottawa, Ontario, Canada. It is known for research contribution in the topics: Monetary policy & Productivity. The organization has 796 authors who have published 886 publications receiving 21366 citations. The organization is also known as: federal government of Canada & Her Majesty's Government.

Changes in the Diversification of Canadian Manufacturing Firms (1973-1997): A Move to Specialization

Abstract: This paper studies changes in diversification of firms and plants since the early 1970s in the Canadian manufacturing sector. It finds that there has been a general increase in specialization of both firms and plants. Firms have been continuously reducing the span of industries in which they operate, particularly when the industries are unrelated. Commodity specialization has also occurred at the plant level; however, in contrast to industry specialization, the pace of commodity specialization emerged late in the period, around the time of implementation of the Free Trade Agreement between Canada and the United States. Plant specialization increased most in those plants that moved most strongly into export markets.

Inflation Targeting Under Imperfect Policy Credibility

Abstract: This paper presents a model for Inflation Targeting under imperfect policy credibility. It modifies the conventional model in three ways: an endogenous policy credibility process, by which monetary policy can gain or lose credibility over time; non-linearities in the inflation equation and in the credibility generating process; and an explicit loss function. The model highlights problems associated with the practice of setting a series of rigid near-term inflation targets. Also, unfavorable supply shocks pose a difficult problem: an appropriate response involves an interest rate increase, some loss of output, and a period of increased inflation. A delayed response can result in a prolonged period of stagflation.

Why Has Inequality in Weekly Earnings Increased in Canada

Abstract: Inequality in weekly earnings increased in the eighties in Canada. The growth in inequality occurred in conjunction with three facts. First, real hourly wages of young workers dropped more than 10%. Second, the percentage of employees working 35-40 hours per week in their main job fell and the fraction of employees working 50 hours or more per week rose. Third, there was a growing tendency for highly paid workers to work long workweeks. We argue that any set of explanations of the increase in weekly earnings inequality must reconcile these three facts. Sectoral changes in the distribution of employment by industry and union status explain roughly 30% of the rise in inequality. The reduction in real minimum wages and the decline of average firm size explain very little of the growth in age-earnings differentials. Skill- biased technological change could have increased both the dispersion of hourly wages and the dispersion of weekly hours of work and, thus, is consistent a priori with the movements observed. Yet other factors may have played an equally important--if not more important--role. The growth in competitive pressures, possible shifts in the bargaining power (between firms and labor) towards firms, the greater locational mobility of firms, the increase in Canada's openness to international trade, the rise in fixed costs of labor and possibly in training costs may be major factors behind the growth in weekly earnings inequality in Canada.

International competition and industrial performance : Allocative efficiency, productive efficiency and turbulence

Abstract: Trade exerts generally favorable effects on the performance of domestic manufacturing industries in the dimensions of allocative and productive efficiency. We review theory and recent evidence on these linkages and also explore a third effect on the turbulence of competitive conditions and the turnover of business units. Calculations using primary census records for Canada over 1973-1992 indicate, with time and industry effect controlled, market-share turnover, entry, exit, and mergers all increase with trade exposure. The effect is tied to market structures of differentiated products, but broad international disturbances (North American Free Trade Area) also have significant effects. The normative significance of turbulence is mixed but has important positive components.

A wake-up call: Information contagion and strategic uncertainty

Abstract: A financial crisis in one region is a wake-up call for investors in other regions If the correlation across regional fundamentals is potentially positive but uncertain ex-ante, investors acquire information about this correlation to determine their exposure Financial contagion can occur in the absence of ex-post exposure, due to elevated strategic uncertainty among informed investors This novel wake-up call theory of contagion explains how currency crises, bank runs, and debt crises spread across regions without a common investor base, ex-post correlated fundamentals or interconnectedness Our wake-up call theory generates testable implications for laboratory experiments and new empirical predictions