Many of the challenges we face in Canada and around the world are
primarily economic. Others that appear to be mainly environmental,
social, or political usually have a significant economic dimension. Wars
and civil unrest throughout history have often had economic roots, with
antagonists competing for control over vital resources; global climate
change is a phenomenon that engages the attention of the scientific and
environmental communities, but the economic implications of both the
problem and its solutions will be tremendous; population aging in
Canada and other developed countries will have consequences for the
structure of our societies, but it will also have significant economic
effects; and the existence of poverty, whether in Canada or in the much
poorer nations of the world, most certainly has economic causes and
consequences. We begin by discussing several issues that are currently of
pressing concern, both inside and outside of Canada. Then, we’ll move on
to acquiring the knowledge and tools we need to better understand these
and many other issues.
Productivity Growth
Productivity growth lies at the heart of the long-term increase in average
living standards. Productivity is a measure of how much output (or
income) is produced by one hour of work effort, and it has been rising
gradually over the past century. In recent years, however, productivity
growth has been slowing in Canada, and economists have been
examining the cause of the slowdown and also examining what policies, if