Investment Intensity in Canada and the United States, 1990 to 2011 - ARCHIVED

This paper examines the investment performance of Canada and the United States, exploring similarities and differences in investments in fixed assets over the 1990-to-2011 period. This is a period when the two countries experienced different shocks. The United States suffered from a major decline in its housing markets after 2007 that did not hit Canada. The world-resource boom in the post-2000 period had a greater impact on Canada than it did on the United States. The Canada–United States exchange rate appreciated dramatically after 2003 thereby making imported machinery and equipment relatively less expensive in Canada.

The comparison is primarily based on investment intensity, measured as the ratio of nominal dollar investment to nominal gross domestic product (GDP), but rates of growth of the volume of investment relative to the volume of GDP are also compared.