The Terms of Trade and Domestic Spending - ARCHIVED

Articles and reports: 11-624-M2008018


This paper empirically illustrates the impact of ongoing changes to Canada's terms of trade. It provides a discussion of how the terms of trade are measured and how to interpret terms of trade shifts. Examples of two major factors affecting Canada's terms of trade are provided, followed by an empirical analysis of how the terms of trade improvements that began in early 2003 have affected consumption, investment and import activity. The paper concludes by illustrating why final domestic demand growth has outpaced real GDP growth since 2003.

Issue Number: 2008018
Author(s): Macdonald, Ryan
FormatRelease dateMore information
HTMLJanuary 17, 2008
PDFJanuary 17, 2008