GROWTH EFFECTS OF RECENT STRUCTURAL-CHANGES IN THE CANADIAN ECONOMY - SOME EMPIRICAL-EVIDENCE

A structural change marked by deindustrialization/servicization in most western economies and the nature and extent of its influence on economic growth continues to be a major topic of interest. The paper rests heavily upon the presumption of the deindustrialization/servicization hypothesis and focuses on the growth implications of such structural changes. Using Canadian data, the paper first explores a causal relationship between goods and service sectors by running Granger-causality tests. It then tests an econometric model to quantify the growth effects of changes in both shares and growth rates of the industrial and the manufacturing sectors. The findings, based on empirical testing of the model over the period 1961-89, suggest that recent structural changes in Canada have had significant negative growth implications.