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Extending McCallum's (1995) result, based on a gravity model of 1988 trade flows, that a typical Canadian province trades 22 times more with other provinces than with U.S. states of similar size and distance, this paper asks how Quebec trade patterns compare with those of other provinces. The results, based on revised data for 1988, 1989 and 1990, show that while the typical province trades more than 20 times as much with other provinces as with comparable U.S. states, for Quebec the multiple is even greater. Thus trade between Quebec and the United States appears to be an even less viable alternative to interprovincial trade for Quebec than it is for the rest of Canada. The implications of these results for international economics are considerable, as they show that trade linkages within a national economy are far greater than previously imagined. If these results are confirmed, they imply that the fabric of national economies is far tighter than that of the global trading system, even for countries operating without substantial trade barriers.

Have regional disparities in Canada changed over the past thirty years? This paper assesses the robustness of earlier findings of convergence in the levels and growth rates of provincial per capita GDP and then estimates the extent to which interprovincial and international migration is being influenced by regional differences in incomes and employment. (EXCERPT)

This paper attempts a quantitative survey of the research activities of Canadian economists during the twent.y-five years since Tony Scott described the anatomy of the Canadian social science community in his 1967 presidential address to the Canadian Political Science Association, the meetings during which this association was founded. My focus is on the research activities of Canadian economists, drawing on data from the Canadian Economics Association (CEA) membership directory, from publications noted by the Journal of Economic Literature from 1969 through 1990, and from economics research grants awarded from 1969 through 1990, at first by the Canada Council and from 1979 on by the Social Sciences and Humanities Research Council. The paper will start with some rough demographic information about who the economic researchers are and how their numbers have changed over the past twenty-five years. The first of the two main sections to follow will deal with the research activities of PH 1)-trained economists who were members of the CEA in 1990 and have published once or more in the journals and books whose contents have been noted in the Journal of Economic Literature. The focus will then turn to the research projects financed by the Canada Council and SSHRCC, and to preliminary assessment of the links between the research grants and research publications

The following six papers analyse and compare the dynamic government expenditure multipliers of four major macroeconometric models (CANDIDE, QFM, RDX2, and TRACE) of the Canadian economy. Since the objective was to keep the models' structures as close as possible to the form in which they are actually used, the experimental design concentrates on standardizing the presentation of results and the conditions under which the simulations were performed. By developing the methodology for decomposing aggregate multipliers into sectoral contributions, the authors were able to attribute the difference in the multipliers to the different sectoral properties. Les miltiplicateurs dynamiques de quatres modeles macro-conom&triques. Les six memoires qui suivent analysent et comparent les multiplicateurs dymamiques des d6penses gouvernementales de quatre modeles macro-6conom6triques importants de l'economie canadienne (CANDIDE, QFM, RDX2, et TRACE). Puisque l'objectif de cet exercice est de pr6server pour chacun des modeles une forme structurelle qui demeure aussi proche que possible de la forme dans laquelle le modele est utilis6, I'exercice s'est attach6 particulierement a standardiser la pr6sentation des resultats et a expliciter les conditions dans lesquelles on effectue les proc6dures de simulation dans chaque cas. Grace a une m6thodologie qui permet de d6composer les multiplicateurs globaux en une s6rie de composantes sectorielles, les auteurs en arrivent a attribuer les differences entre les multiplicateurs dans les differents modeles a des differences dans leurs propriet6s sectorielles.

The Conversion Loan of 1958: a simulation study of its macroeconomic consequences. Simulating with the RDx2 model of the Canadian economy, we establish the time pattern of the macroeconomic impacts of the 1958 Conversion Loan which doubled the average term to maturity of the federal debt. We find a maximum flow impact in 1960 of -1.6 per cent of real GNE, moderated by the accompanying price support programme to -1 per cent. The contractionary forces come from the decline in investment occasioned by the rise in the long rate. We find little impact through an appreciating exchange rate. We evaluate the prospects for a policy such as Operation Twist and find them quantitatively significant.

Simulation des effets globaux des recommandations du Rapport Carter. Pour apprecier les effets globaux de modifications du regime fiscal aussi radicales que celles que propose la Commission Royale sur la Fiscalite, II faut poser un certain nombre de postulats quand aux reactions de differents agents 6conomiques. Dans une perspective de statique compar6e l'auteur construit un modele ou les relations entre les diverses hpotheses de comportement sont explicitees ; dans ce cadre d'hypoth6ses, il est possible d'6valuer les effets directs et indirects des recommandations de la Commission. Si on peut exprimer les hypoth&ses de comportement d'un tel modele en termes de probabilite, il devient des lors possible d efRectuer des experiences de simulation permettant d'evaluer les distributions de probabilite des principales variables agregatives endogenes. L'auteur retient deux versions fondamentales du modele. Dans la premiere version, on suppose que la hausse probable du cours des actions est determin6e de fagon exogene et on resout le modele pour voir quelle sera l'allure de la demande gloybale qui en r6sulte. Dans la seconde version, on examine les effets a long terme. Precisions que dans ce cas, le niveau de la demande globale r6elle est d6termine par la capacit6 de produire et non pas uniquement par la demande globale, de plus on traite le cours des actions comme un facteur endogene. On a effectue des simulations -avec les deux modeles de maniere A obtenir des distributions de probabilit6 pour la consommation, l'investissement (pour les industries d'extraction et les autres branches d'activit6 et pour les r6sidents et les non-residents), l'epargne des menages et des entreprises, le rendement des imp6ts directs et indirects, les mouvements de marchandises et de capitaux, les taux d'interet et plusieurs autres variables. L'auteur pr6sente encore d'autres versions du modele et les solutionne pour montrer les consequences d6coulant de postulats de comportement diff6rents.

ModMle d'anrlyse du march6 du change etranger. Le but de cette etude est d'expliquer l'interd6pendance des demandes privee et publique pour le change etranger. L'apport principal de r'etude a ete de reconnaitre le caractere endogene des demandes publique et priv6e pour le change courant et pour le change a terme, aussi bien sous un regime de taux de change fixe que sous un regime de taux de change libre. Les implications th6oriques d6coulant de l'analyse sont explicitees pour les deux regimes etudies. Dans le cas d'un taux de change fixe, l'auteur utilise, pour l'estimation du taux de change et des equations structurelles de demande, la methode des variables instrumentales ordonnees selon la structure logique du modele. Dans ce cas, l'auteur utilise des observations mensuelles sur le marche canadien du change 6tranger pour la periode 1963-1966.

I welcome the opportunity to amplify the purpose and details of my proposal. My purpose was to develop a simple approximative procedure for avoiding the taxation of inflationary gains and removing the "lock-in" effect. In the interests of brevity, I did not consider what marginal tax rate would be used nor whether the interest rate used to accumulate the tax liabilities ought to be on a before-tax or on an after-tax basis. Dr Shibata has suggested that separate marginal tax rates ought to be used for each year during which the asset is held, and that, if interest on money borrowed to pay taxes were tax-deductible, one ought to put the interest rate on an after-tax basis. If both marginal tax rates and the after-tax borrowing rates were given separate values for each year within the asset holder's period, the calculation formulae for my procedure would become more complicated, and the relevant taxable amount could no longer be read from a simple two-dimensional table. Dr Shibata is right to emphasize that whether or not his amendments to my procedure are worth making depends on the differences they would make to the amount of tax payable. These differences ought to be looked at in relation to the greater costs of calculation using his amended version of my proposal. In general, I would suppose that any tax system which was attempting to treat capital gains equivalently to other forms of income would also embody good income averaging procedures. If so, then there would be little inter-temporal variation in marginal tax rates to worry about. If there were not good income-averaging provisions, taxpayers would schedule their asset sales in order to help average out income fluctuations if the entire gain were put into taxable income of the year of sale. In order to avoid this undesirable trading purely for tax reasons, I would recommend that the marginal rate applicable to realized gains (as calculated by my procedure) should be the individual's average marginal rate over the holding period, or over a specified number of past years. This is very much a second-best procedure, however, as it would be much simpler and more appropriate to have good averaging provisions for all sorts of income. I agree with Dr Shibata that the interest rate assumed in my procedure should be on an after-tax basis if interest on money borrowed to pay taxes were tax-deductible. The arbitrary interest rate would just be equal to the assumed "typical" market rate times one minus a "typical" marginal tax rate. Whether it is worthwhile making Shibata's amendment making year-to-year changes in the marginal tax rate used in defining the after-tax borrowing rate depends, as before, on how good are the income-averaging provisions. Even though Dr Shibata's amendments would be unnecessary in a tax system with good income-averaging provisions, it is worthwhile to consider

Les mouvements de capitaux 2 court terme et le marche du change etranger. Les auteurs utilisent un modele h sept equations du marche canadien du change etranger fonctionnant durant la periode 1963-70 dans le cadre des regles du Fonds monetaire international relatives au taux de change fixe et ajustable (<< pegged -). L'article contient des estimations de parametres et des resultats de simulations. Le modele est une version amelioree de celui qui a ete presente ici en fevrier 1969; les auteurs y ont ajoute les equations d'accumulation d'actifs necessaires aux simulations dynamiques. Deux caracteristiques differencient ce modele des autres: l'utilisation d'equations distinctes pour la demande generale (a private f) et la demande des autorites (< official -) qui determinent conjointement le taux de change etranger et les variations des reserves de devises; par la suite, l'utilisation de l'identite de la balance des paiements pour la determination des mouvements de capitaux a court terme. Les auteurs se servent de donnees trirnestrielles de la periode 1963-8 pour estimer trois equations stochastiques: deux equations de demande de devises sur le marche courant, l'une de la part des autorites et l'autre generale, et une equation de forme reduite pour le taux de change 'a terme de 90 jours. La simulation dynamique du modele pour la periode 1963-70 donne des resultats qui suivent assez bien les variations des reserves et les taux de change courant et a terme. Les resultats de la simulation de comparaison aux donn6es reelles pour laquelle on a utilise la version du modele consideree la meilleure sont pr6sentes dans le graphique 1. Des simulations de politique ont ete faites pour illustrer les effets des changements du taux d'int6r6t interieur et de la politique de soutien du taux de change A terme. Ces deux politiques ont des effets substantiels sur le niveau des reserves courantes de devises; toutefois, l'utilisation de l'equation d'ajustement en stock relative 'a la demande generale de devises garantit que l'accumulation induite de reserves atteint eventuellement une limite meme en I'absence d'activites speculatives induites.