What might a serious growth agenda look like? More labour, more capital, and more incentive to use both wisely
https://www.theglobeandmail.com/opinion/article-what-might-a-serious-growth-agenda-look-like-more-labour-more-capital/
ANDREW COYNE notes:
On one level what makes an economy grow is tediously simple, a function of labour, capital and technical change. More labour – more people working, and more of them working longer hours – plus more capital (machinery and equipment, but also intellectual property, education and skills) for each worker, plus more ingenuity in how these are combined, should lead to higher growth. But these are more easily observed than engineered.
A casual observer might think we had more than enough labour. Indeed, the government is hardly alone in blaming the recent nosedive in per capita GDP on the surge in labour supply. Other things being equal, that should mean less capital investment per worker, and therefore less output per worker.
But that assumes the supply of capital remains fixed, or at least that current investment levels are a given. But Canada’s economy absorbed as high or higher numbers of workers in the past, without suffering declines in per capita output – because investment was growing just as fast. The problem is not that population is growing at 2 or 3 per cent a year, but that the economy isn’t.
https://www.theglobeandmail.com/opinion/article-what-might-a-serious-growth-agenda-look-like-more-labour-more-capital/
ANDREW COYNE notes:
On one level what makes an economy grow is tediously simple, a function of labour, capital and technical change. More labour – more people working, and more of them working longer hours – plus more capital (machinery and equipment, but also intellectual property, education and skills) for each worker, plus more ingenuity in how these are combined, should lead to higher growth. But these are more easily observed than engineered.
A casual observer might think we had more than enough labour. Indeed, the government is hardly alone in blaming the recent nosedive in per capita GDP on the surge in labour supply. Other things being equal, that should mean less capital investment per worker, and therefore less output per worker.
But that assumes the supply of capital remains fixed, or at least that current investment levels are a given. But Canada’s economy absorbed as high or higher numbers of workers in the past, without suffering declines in per capita output – because investment was growing just as fast. The problem is not that population is growing at 2 or 3 per cent a year, but that the economy isn’t.
Canadians face 40 years of stagnant incomes –
government’s economic strategy is failing
https://www.theglobeandmail.com/business/commentary/article-canada-economic-growth-strategy/
Canada’s housing bubble: ‘Sliding down the slippery
slope of hope’
https://www.theglobeandmail.com/business/commentary/article-canadas-housing-bubble-sliding-down-the-slippery-slope-of-hope/
https://www.theglobeandmail.com/business/commentary/article-canada-economic-growth-strategy/
https://www.theglobeandmail.com/business/commentary/article-canadas-housing-bubble-sliding-down-the-slippery-slope-of-hope/