tag:blogger.com,1999:blog-8702840202604739302.post5793199644647410575..comments2024-03-28T03:38:53.734-07:00Comments on MacroMania: Employment slumps in Canada and the U.S. David Andolfattohttp://www.blogger.com/profile/12138572028306561024noreply@blogger.comBlogger12125tag:blogger.com,1999:blog-8702840202604739302.post-90363374776577139742013-11-01T06:12:34.068-07:002013-11-01T06:12:34.068-07:00Thanks Prof J! I'll take a look at the paper a...Thanks Prof J! I'll take a look at the paper and follow the thread through the literature.Cmdt.Edhttps://www.blogger.com/profile/10075513548494493104noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-9200684963218270462013-10-31T11:25:27.583-07:002013-10-31T11:25:27.583-07:00Thanks Prof J. Yes, I'm aware of this piece by...Thanks Prof J. Yes, I'm aware of this piece by Fortin, and by the rebuttal by economists at the BOC. But I haven't seen anything published on the subject since then. David Andolfattohttps://www.blogger.com/profile/12138572028306561024noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-20792476291091946722013-10-31T10:32:21.116-07:002013-10-31T10:32:21.116-07:00David,
As I recall, there is something to the man...David,<br /><br />As I recall, there is something to the manufacturing story & exchange rates. As the Canadian dollar strengthened in the early 1990s from very low values to the $US in the 1980s, manufacturers faced losses because sales to the US went down. <br /><br />I did find this paper on the issue, not sure if you've read it yet: http://www.jstor.org/stable/136214. The author ends up blaming monetary policy & fiscal policy, saying they were too tight in Canada during that period. It's an interesting read, but I think it's an issue worth revisiting.Prof Jhttps://www.blogger.com/profile/16539902592080231165noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-50349917156888327972013-10-24T08:20:40.089-07:002013-10-24T08:20:40.089-07:00Cmdt.Ed,
Am looking in to it. We might want to lo...Cmdt.Ed,<br /><br />Am looking in to it. We might want to look for sectoral explanations. I recall that central Canada (Ontario & Quebec) were hit harder in the 90s relative to other parts of the country (this is where the manufacturing is centered). The opposite was true in the 1981-82 recession. So, I wonder whether U.S. states with similar industrial structure to Ontario experienced something as severe as Canada. David Andolfattohttps://www.blogger.com/profile/12138572028306561024noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-63880586290686772022013-10-24T05:25:02.804-07:002013-10-24T05:25:02.804-07:00Thanks. That lists some generic causes (which are ...Thanks. That lists some generic causes (which are good to know), but it doesn't explain why Canada was hit so much harder than other countries. From what I see, unemployment hit over 12% in Canada for the 1990 recession but didn't even reach 9% in the 2008--2009 recession or go much above 8% in the 2001 recession. From the unemployment data anyway, it sure seems like something different was going on in Canada in the 1990 recession than in other recessions in Canada or in other countries in 1990. I'd love to know if you have any thoughts on that. Thanks.Cmdt.Edhttps://www.blogger.com/profile/10075513548494493104noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-22741856359770690642013-10-24T01:56:13.060-07:002013-10-24T01:56:13.060-07:00Causes? Here are some candidates:
http://en.wiki...Causes? Here are some candidates: <br /><br />http://en.wikipedia.org/wiki/Early_1990s_recession<br /><br />There may have been something to the "austerity" measures taken by the finance minister Paul Martin. It may also be the case that the "short term" pain laid the groundwork for longer term resilience. I would like to investigate. <br />David Andolfattohttps://www.blogger.com/profile/12138572028306561024noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-87391416733934441942013-10-23T11:33:33.972-07:002013-10-23T11:33:33.972-07:00Thank you for a very interesting post.
Could you ...Thank you for a very interesting post.<br /><br />Could you also tell us a little more about the causes of the 1990-1991 recession in Canada? I followed your link to what you wrote previously (which was also quite interesting) but it was harder to find something describing why Canada had such a sharp recession in 1990-1991. I also tried google without much luck.<br /><br />While it seemed like there were a few areas with expensive housing, it didn't look like a nationwide housing bubble like in the US. Do you think the problem was that Canada responded with much more austerity (in terms of spending cuts) and that turned a "normal" recession into such a bad one or was there something else that made the 1990-1991 recession so bad in Canada?<br /><br />ThanksCmdt.Edhttps://www.blogger.com/profile/10075513548494493104noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-37833265009153594512013-10-23T08:28:20.642-07:002013-10-23T08:28:20.642-07:00One should look at productivity and wage differenc...One should look at productivity and wage differences between Canada and US and how recessions impact employment considering these differences (especially important for some provinces like Québec where productivity/wages are low and the 2008 recession impact relatively small in comparison to the US).Jules Bélangerhttps://www.blogger.com/profile/07445987734164290082noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-46448373308996889162013-10-23T07:35:37.115-07:002013-10-23T07:35:37.115-07:00Yes, should perhaps focus on the 20-55 male group ...Yes, should perhaps focus on the 20-55 male group to control for demographics. U.S. follows Canada? I've been toying with that conjecture for a while now. But who knows? Nick, you should be able to write on this -- you must have a clear recollection of the 90s in Canada. What ever happened to the Macklem-Fortin debates?David Andolfattohttps://www.blogger.com/profile/12138572028306561024noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-82652970939333066542013-10-23T05:20:48.827-07:002013-10-23T05:20:48.827-07:00Interesting. A couple of thoughts:
1. The 20-24 (...Interesting. A couple of thoughts:<br /><br />1. The 20-24 (both men and women) and the 25-54 (men) are the graphs that are closest for US and Canada. I think that is because those graphs tell the clearest story about AD shocks. Because: the 55+ graphs are affected by demographic changes (the boomers); the 25-54 (women) graphs are affected by women's increasing participation rates; the 15-19 are affected by changing participation rates in post-secondary education.<br /><br />2. The 1991 Canadian recession was associated with inflation falling from an around 4%-5% trend in the late 1980's to the new 2% inflation target in the 1990s.<br /><br />3. So the US simply follows Canada, eh?Nick Rowehttps://www.blogger.com/profile/04982579343160429422noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-14083273553450615152013-10-22T13:57:37.436-07:002013-10-22T13:57:37.436-07:00Andrew: you might want to take a look at this as w...Andrew: you might want to take a look at this as well, http://andolfatto.blogspot.com/2012/09/how-canada-saved-its-bacon.htmlDavid Andolfattohttps://www.blogger.com/profile/12138572028306561024noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-37183266325851372192013-10-22T13:43:52.925-07:002013-10-22T13:43:52.925-07:00This is neat. I suspect that a lot of Canadian PhD...This is neat. I suspect that a lot of Canadian PhD students are probably too young to have any intuition about the early-90s recession in Canada, though. I certainly had no idea that labor force participation dropped so much.Andrewhttps://www.blogger.com/profile/05777425471982807343noreply@blogger.com