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| Loris Rubini |
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| ''Productivity and Trade Liberalizations in Canada'' |
| ( 2015, Vol. 35 No.2 ) |
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| I study the evolution of productivity in Canada relative to the United
States during two trade liberalization episodes: the 1965 Auto Pact and
the 1989 Free Trade Agreement. I find that Canada´s productivity grew
more than U.S. productivity in the liberalized sector, which is consistent
with the idea that openness increases productivity. This study reveals new
evidence of productivity during the Auto Pact. Regarding the Free Trade
Agreement, existing studies find that manufacturing productivity grew less
in Canada than in the United States following the agreement. I argue that
this is due to the use of prices that are not comparable across countries.
Once these prices are made comparable, my findings are that
manufacturing productivity grew more in Canada than in the U.S. The results of this study suggest there are productivity gains
associated with trade liberalization, and models of international trade
should account for them.
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| Keywords: Auto Pact, US - Canada Free Trade Agreement, Productivity Gains from Trade. |
JEL: F1 - Trade: General
F4 - Macroeconomic Aspects of International Trade and Finance: General |
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| Manuscript Received : Nov 28 2014 | | Manuscript Accepted : Jun 09 2015 |
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