{"id":10229,"date":"2011-07-11T10:04:51","date_gmt":"2011-07-11T14:04:51","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=10229"},"modified":"2011-07-11T10:04:51","modified_gmt":"2011-07-11T14:04:51","slug":"us-economic-slowdown-and-the-impact-on-canadian-exports","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2011\/07\/11\/us-economic-slowdown-and-the-impact-on-canadian-exports\/","title":{"rendered":"US economic slowdown and the impact on Canadian exports"},"content":{"rendered":"<p>Over at the <em>Globe and Mail<\/em>, <a href=\"http:\/\/www.theglobeandmail.com\/report-on-business\/economy\/economy-lab\/stephen-gordon\/prices-take-a-hit-when-us-economy-slows-not-exports\/article2093086\/\" target=\"_blank\">Stephen Gordon<\/a> debunks the old saw &#8220;When the U.S. sneezes, Canada catches cold&#8221;:<\/p>\n<blockquote>\n<p>About 30 per cent of Canadian output is exported, and roughly 75 per cent of exports go to the U.S., which means that some 20-25 per cent of Canadian GDP is exported to the United States. If U.S. demand for Canadian exports were proportional to U.S. income, a 1 per cent decline in U.S. GDP would show up as a 0.2-0.25 per cent decline in Canadian output. (See also <a href=\"http:\/\/worthwhile.typepad.com\/worthwhile_canadian_initi\/2008\/12\/why-are-forecasters-predicting-a-mild-recession-for-canada.html\" target=\"_blank\">here<\/a>, where I estimate that everything else held constant, a 1 per cent decline in U.S. GDP produces a 0.3 per cent decline in Canadian GDP).<\/p>\n<p>But of course, everything else isn\u2019t held constant when the U.S. goes into recession. For reasons that are not immediately obvious to me, the forex market\u2019s response to a U.S. recession is to produce an appreciation in the U.S. dollar against ours. The resulting depreciation in the Canadian dollar has the effect of increasing net exports. In each of the last three recessions, net exports have provided a <em>positive<\/em> contribution to Canadian GDP growth. <\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>Over at the Globe and Mail, Stephen Gordon debunks the old saw &#8220;When the U.S. sneezes, Canada catches cold&#8221;: About 30 per cent of Canadian output is exported, and roughly 75 per cent of exports go to the U.S., which means that some 20-25 per cent of Canadian GDP is exported to the United States. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[6,25,13],"tags":[320],"class_list":["post-10229","post","type-post","status-publish","format-standard","hentry","category-cancon","category-economics","category-usa","tag-freetrade"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-2EZ","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/10229","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=10229"}],"version-history":[{"count":1,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/10229\/revisions"}],"predecessor-version":[{"id":10230,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/10229\/revisions\/10230"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=10229"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=10229"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=10229"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}