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The Effects on Canada of Industrial Fluctuations in the United States1

Published online by Cambridge University Press:  07 November 2014

R. B. Bryce
R. B. Bryce*
Affiliation:
Ottawa
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Extract

Some attention must first be given to the nature of the determination of the general levels of incomes, production, prices, and employment. Of course these levels are in some way or other affected by most things under the sun and are, in fact, merely statistical aggregates composed of millions of individual activities and transactions each determined by its circumstances, and all interdependent. Even if one concedes that some grouping is necessary to bring this chaos within the realms of description and analysis, it may still be urged, particularly in Canada and the United States, that regions and industries must be dealt with separately, that we cannot lump together production of wheat, newsprint, and houses and get any results of significance. While recognizing the validity of this contention, it has seemed necessary to use a number of familiar aggregative concepts in this paper.

Type
Articles
Information
Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 5 , Issue 3 , August 1939 , pp. 373 - 386
Copyright
Copyright © Canadian Political Science Association 1939

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Footnotes

1

It should be stressed that the views expressed or implied in this paper are my personal views and are not in any sense official. Some references have been made in the foot-notes to the discussion which followed the reading of this paper. The writer regrets that there is not fuller record thereof.

References

2 In the discussion on this paper the point was raised by Mr. L. Tarshis that some justification might be found for treating total expenditures of Governments on the same footing as investment or export income, on grounds somewhat similar to those on which the treatment of exports is considered later in this paper. The writer conceded that it was largely a question of convenience or methodology, as well as, by now, con-vention, but suggested also that the offsetting factor, the revenue collected by the public authorities, could usually be considered less a “passive” factor than saving or even international debits, and more a matter of budgetary policy.

3 It should perhaps be added that by influencing other raw material prices the United States probably has some influence (how much is a very difficult question) on the course of economic fluctuation in raw material producing countries, and thus, perhaps, as Professor Bowley suggests, very significantly, on Britain (and Canada). This is an intricate subject which invites analysis.

4 Considerable discussion took place on this point concerning repatriation as an “investment” outlet, in the economists' sense. It was argued that the purchase of securities from foreigners, while it may be a means of disposing of capital, does not itself provide domestic incomes, as investment does. The writer replied to the effect that repatriation offered a relatively riskless opportunity for “foreign investment” and that this indirectly served as a stimulus to domestic activity through encouraging exports and hindering imports. The medium of this influence under modern conditions was apt to be the exchange rate (under gold standard conditions it would be relative price and cost levels) which would probably be lowered, or heid down, by the demand for foreign exchange for repatriation of securities.