On the Interrelationships between the Services-Producing Industries and the Goods-Producing Industries of Canada.

This article reports the results of research into the interdependence of the services-producing and goods-producing sectors in Canada. Using an input-output model, an approach developed by Miyazawa [1976] is used to decompose a total potential stimulus into three components for each sector: an internal multiplier, an external multiplier, and an intersectoral multiplier. Due to the dominance of the internal multiplier, the total potential of the goods sector for propagating an economic stimulus is found to be larger than that of the services sector. The external multiplier of the service sector, a more dynamic sector which has gained momentum, is found to be larger than that for the goods sector. The results confirm the growing role and significance of the service sector in the Canadian economy. The highly complementary nature of the interaction of the two sectors is a conclusion reached through an appraisal of intersectoral multipliers. [ABSTRACT FROM AUTHOR]