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Accounting for Slower Productivity Growth in the Canadian Business Sector After 2000

26 Oct 2018

'Labour productivity growth and multifactor productivity (MFP) growth slowed in Canada and other advanced economies after 2000. Several measurement challenges have been suggested as potential explanations for this trend. These include the measurement of intangible capital in a digital economy, the measurement of natural resource capital in the resource extraction sectors, the effect of infrastructure capital and the effect of cyclical fluctuations in the utilization of capital in industries adversely affected by world demand. This paper focuses on the role of these measurement issues in the slower productivity growth observed in Canada. It finds that measurement issues alone cannot explain the slowdown in productivity growth in Canada after 2000. Only 25% of the decline in MFP growth in the Canadian business sector in the period from 2000 to 2015, compared with the period from 1980 to 2000, is due to an increase in the use of produced capital and in the intermediate inputs required to extract natural resources with declining ore grades, and declining capital utilization in manufacturing. The decline in labour productivity and MFP growth is not due to changes in intangible capital and infrastructure capital after 2000'--Abstract, p. 5.
economics economy mining science and technology natural resources business economic growth employment natural resource capacity utilization growth accounting rate of return capital (economics) business economics factors of production gross output cyclical fluctuations
ISBN
9780660275840
ISSN
12059153
Pages
31
Published in
Ottawa, ON, CA

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