I
»
~-"--'If\
B ·
~I s
G c,/es
wJ./
G
,'I
"rh fh
So-I-
i.f ,
,t
t
14
oet.,,,,
Real GDP Growth in
Canada and the United
States In Canada the
Percentage
change /Tom 10
4 quarters
earlier
-4
1970
1995
growth rate in real COP
averages around 3.1 percent per year, as indicated
by the green line in Panel
(a). But there is a wide
variation around this
" average. Recessions are
,periods
during which real
COP falls-that is, during
which real COP growth is
negative. U.S. COP is
shown in Panel (b).
Clearly business cycles in
the cwo economies are
closely connected. But the
state of the U.S. economy
is not the only important
1999 thing for Canada.
Vear
Source: Statistics Canada.
014872, and U.S.
Depan:menc of Commerce.
Percentage
change /Tom 10
4 quarters
earlier
-4
1970
1995
Vear
Figure 9.8
Cyclical behaviour of
the unemployment
rate
The unemployment rate is
countercyclical and very
sensitive to the business
cycle. It rises rapidly in
contractions but falls
more slowly in expansions.
... ~
QI'"'"
..oS..
III
14
QI
PT
I
c
QI ~
[=
I
12
_CI~ III
CIoo-
5'0
QI
QI
I:
blI
::JS
10
~
~
I:
QI
~
••CIoo
Source: monthly unemployment
rate. seasonally adjusted:
Canadian Economic Observer.
Statistical Summary or CANSIM
0980745.
PT
P
T
~
,
;
<
i
f
>
~
•
I.
"t
<lI
'-'
8
UNEMPLOYMENT
RATE
:.:..-:
ilk
6
~
..
~fj
~I~
..
r
7,
I
~
4
~,
~
~
't
~
~
2
1970
1975
1980
1985
1990
1995
Year
Figure 9.9
Cyclical behaviour of
average labour
productivity
Average labour productivity, measured as real out·
put per person employed,
is procyclical and leading.
Source: monthly GOPat factor
cost and monthly employment,
both seasonally adjusted:
Canadian Economic Obsenter,
Statistical Summary or CANSIM
156001 and 0980595.
e-.....
~ g
-=1:
= CIoo
~
50
QI
11
47 5
.
AVERAGE
LABOUR
PRODUCTIVITY
.8~~CI
.! "1:1 45.0
QiIN
!=
~ ...
<0
4/'"
~ 42.5
=o=
-=
'-'
40.0
1995
Year
~
Cyclic:al behaviour of
in~strial
production
IndlLstrial production, an
aggr@gateof production
in all industries, is
procyclical and coincident
with the business cycle.
The peaks and troughs of
the business cycle are
shown by the vertical lines
P and T. The shaded areas
represent recessions.
Source: monthly industrial
production, seasonally adjusted:
Canadian Economic Observer,
Statistical Summary or CANSIM
156010.
1995
Year
• 0::::l-.W
-
_.-
Cyclical behaviour of
consumption and
investment
Both consumption and investment are procyclical.
However, investment is
more sensitive than consumption to the business
cycle, reflecting the fact
that durable goods are a
larger part of investment
spending than they are of
consumption spending.
Source: consumption and
businessfixed investment, real,
quarterly, and seasonally
adjusted: Canadian Economic Observer, Statistical Supplement or
CANSIM 015372 and 014851.
ij
500
!:l"C
=
;ON
,S=
"C=
PT
PT
PT PT
PT
PTPT
••
J
400
==
g =:!
Q,§=
'tl
~~
300
a'-'
=
0
200
100
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
Year
Table 9.1
Canadian Business Cycle
Turning Points and Durations
Expansion
(Months from
Trough to Peak)
Trough
.;
Contraction
(Months from Peak
to Next·Trough)
Peak
May
Mar.
Feb.
Mar.
Mar.
18i9
1885
1888
1891
1894
38
23
29
23
Ii
Nov. 18i3
July 1882
Feb. 1887
.July 1890
Feb. 1893
Aug. 1895
66
32
12
9
1:3
12
Aug.
Feb.
June
July
July
1896
1901
1904
1908
1911
44
22
30
20
16
Apr.
Dee.
Dec.
Mar.
Nov.
1900
1902
1906
1910
1912
10
18
19
16
26
Jan.
Apr.
Sep.
Aug.
Mar.
1915
1919
1921
1924
1033
36 (WWI)
14
21
56
52
~
80 (WWII)
3:3
44 (Korean War)
31
26
Jan. 1918
June 1920
June 1923
Apr. 1929
July 1937
_
Oct. 1938
Feb. 1946
Sep. 1949
July 1954
Feb. 1958
Feb.
Apr.
July
Nov.
Apr.
1961
1975
1980
1982
1992
..~
-
A
•••• ~
160
58
12
89
,
~
June 1945
-
A~
c.~~
~
!tV
Oct. 1948
May 1953
Feb. 1957
Apr. 1960
June 1974
Feb. 1980
July 1981
Apr. 1990
10
6
16
24
.• ~7+t~J
1"~
t"t
-A
\i1'
~.
." ~\1S1~
"Late Ninet'-'enth Century Business Cycles in C.•anada: GClfuuliJm
August 1!J64, pp. :J91-412: l!I()(l-l!H9: Kt!ith A. .I. Hay, "Early
Twentit!th Century Business Cycles ill Canada: CmuulicLt/. ./ounuL! of F:cmuJmiJ;,< (nul Political Sc:i.mu:". All'
gust 19li6, pp. :1:>4~11j!j; 1!11!l-l!J:>4: Edward.J. Chambers, "Canadian Business Cyr:l"s sine" 1!1I!1: A Pro!!r••ss R,,·
port," Cmuutu:n ./ounull
Ecmwmics mui Political Sr;icmr.a, May 191)1l, pp. II~i-lll!J: 1!1['2-1 H!l2: Philip (;ros.~
and Francillt! Roy·Mayr:uIlt, "St"ltislies C:u,ada's New SYStt!lllor Lc:l<lillllhllliealors," (:muuli ••n i!..·cmwm';J; (1).
s""""r, Ft'llruary I!JI!!J. pp. :1.1-:1.:17; 1!11!2-l!I!)~: Philip Crnss, "Alll'rnaliv,' M";L'lm'S or flusill"ss Cyd,'s ill
(;.u~,da: I!J47-I!JH2," c;'LfuulicLn /-;ccmlJ7Ttu: OIJ""nwr, ~'"bnlary !!J!Jli, PI'. :l.1-:l.·lll. Cnlltracliolls ill Wli7 awl
I!J711w,'re tIM'mild tn <:Ollnla., nl<:cssions. i\lt"n~ltiv" postwar (~lt('S art! !livt,n by (;.~)rrrt,y II. MtMJr"and Viewr
7..",nll,wtlZ,"Th•• Dt'VI'lopmenl ;UIltRul., or till' Nalional Uure~u or Eenllmnic Ilt!sPaI'<:h'sfllls;",,,;,; Cyde eh",lInlo·
or
AlJpt~ndixA in llohert.1. (;ordoll,
f~I.• Th,!
Arnenctl"lt
nU ••
:;nlf!.~•• Cydf~: CtTlIlt"1I1t1.I!l
'?..,
¥'i'\{t~riJ,>~
Av~ ,
Scifffl£/!,
lJlliwrsily of Chiea!(o Pn",s awl Natinnal Ollr"anllf I::<:onumicIl,,,..'arch. !!JlIli, Tall'" AI!.
~
(1i~~dto~
Sources: 1873-1897: Edward J. Cham~rs,
~l(~S:'
\Oil'!;
"""",-
•
Jourru.LI. of EccYTlmTLir.sand PoliliJ;al
~~
•
15
15
14
47 (Depression)
15,.(Depression)
8
11
14
12
10
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