An econometric model of structural change: a case study of Canada |
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Authors: | Mohammed I Ansari |
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Institution: | Faculty of Arts , Athabasca University , Athabasca , Alberta , T0G 2R0 , Canada |
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Abstract: | The study postulates that structural change in a resource-based economy can, in large part, be explained by the behaviour of the relative wages. Different wage responses in tradeable and non-tradeable sectors create, over the course of the business cycle, a ‘ratchet effect’ which gradually squeezes the tradeable sector relative to the non-tradeable sector. Although the analysis is undertaken mainly within the Dutch-disease framework, an econometric model incorporating key elements of various views on the subject is tested for Canada. The results are consistent with the predictions of the model. |
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