A structural interpretation of the recent weakness in business investment / by Russell Barnett and Rhys Mendes.: FB3-7/2017-7E-PDF
"Since 2012, business investment growth has slowed considerably in advanced economies, averaging a little less than 2 per cent versus the 4 per cent growth rates experienced in the period leading up to crisis. Several recent studies have attributed a large part of the weakness in business investment to cyclical factors, including soft aggregate demand, and, to a lesser degree, heightened uncertainty and tighter financial conditions. In contrast, our analysis suggests that structural factors could provide an alternative explanation for the observed weakness in Canadian business investment. As a result, there is a risk that this weakness could prove to be much more persistent than cyclical interpretations suggest. Overall, population aging combined with two factors that could prove to be structural—weak productivity growth and the 2014–15 collapse in oil prices—could plausibly reduce the investment-to-output ratio by as much as 2 percentage points by 2020 relative to the average of 12 per cent observed since 2000, or an additional 0.9 percentage points relative to its 2016 value. This would have important implications for the economic outlook."--Abstract, p. iii.
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| Department/Agency | Bank of Canada. |
|---|---|
| Title | A structural interpretation of the recent weakness in business investment / by Russell Barnett and Rhys Mendes. |
| Series title | Staff analytical note = Note analytique du personnel, 2369-9639 ; 2017-7 |
| Publication type | Series - View Master Record |
| Language | [English] |
| Format | Electronic |
| Electronic document | |
| Note(s) | Title from cover. Includes bibliographical references. Text in English, abstract in English and French. |
| Publishing information | Ottawa : Bank of Canada, c2017. |
| Author / Contributor | Barnett, Russell A. Mendes, Rhys R. |
| Description | iv, 14 p. : graphs |
| Catalogue number |
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| Subject terms | Economic indicators Business development Investments |
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