Canadian Politics from Canada's Centre

Tuesday, February 28, 2006

Impact of NAFTA on Canada: Introduction and Basis of Research

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Here's the introduction to my research article analyzing the economic effects of NAFTA on Canada and canadians. It gives backgrounrd on the topic, and explains how and why the research was conducted as it was. You can see the results of the research here: GDP and GDP per capita, Household and National Savings Rates, Unemployment rates, Wages and remuneration. The first part of our commentary concerns the disconnect between growing GDP and relatively stagnant wages. The rest of the commentary and paper may be gotten by subscribing to the website's newsletter by email or RSS. We have a total privacy policy, so you needn't worry about spam. Once you subscribe, just email me (Shplarz @ and let me know you'd like a copy.

Without further ado, I present the Introduction and basis of my research on NAFTA'S economic impact on Canadians.

The word "economics" comes from the ancient Greek words "oikos" and "nomos," which mean, respectively, the "family estate" and "laws of man" (as opposed to "physis," the laws of nature). One can reasonably infer from this knowledge that economics has existed in some form since even Antiquity. It follows that there a multiplicity of economic theories must have been created and expounded upon since then. Since Adam Smith's famous "Wealth of Nations," modern economics has focused on measuring the health of national economies. More recently, this macroeconomic approach to things has been contrasted with microeconomics, whose focus is on the transfer of wealth on a smaller, individual scale. An example of such contrasts are the contemporary measures of economic well-being: GDP and GDP per capita represent the macroeconomic approach to calculating wealth, while the Household Savings Rate and Average Income are important representatives of the microeconomic approach.

Judgements are based on criteria. To ensure sound analysis, the criteria used must be relevant to the issue at hand, and should account for as much data as possible. Thus in order to determine the effect of any particular economic actor, one should use measures of economic performance, which ought to be drawn from both the worlds of macro- and microeconomics. These are the means proposed to assess the impact of NAFTA on the Canadian nation, and on Canadians as individuals.

To be more specific, the data reported by the following measures of economic health is that data which will be used to weigh up the economic outcome of NAFTA in Canada. The measures are: GDP (Gross Domestic Product), GDP/Capita, National Savings Rate, Household Savings Rate, Unemployment Rate, Labour Productivity, and.

Two likely measures have been left off this list, namely the Current Account and Investment Rates. In the case of the former, the omission is due to the fact that measuring a nation's balance of trade is outdated, and doesn't give a true indication of economic welfare. In the case of the latter, the omission is due to my inability to find the relevant data.

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Posts relating to Economics and NAFTA:
  1. GDP and GDP per capita since NAFTA - Next in the series.

  2. Unemployment in Canada since NAFTA

  3. Outline of the impact of NAFTA on Canadians' research project (discusses non-economic criteria for evaluation)


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