Canadian Standard of Living Plummets Lower, Approaching Lost Decade: NBF
Canadians were warned about building a housing-based economy, now they’re approaching a lost decade. National Bank of Canada Financial (NBF) recently wrote to institutions to warn the country’s productivity is stagnating. As a result, so is the quality of life as real gross domestic product (GDP) remains at the same level it was 7 years ago—and it’s heading in the wrong direction.
Productivity and Real GDP Per Capita
Real GDP per capita is the inflation adjusted value of an economy’s output, divided by population. We know that rising real GDP is generally a good thing, since higher output tends to correlate with increased national wealth. However, in rare cases a country’s population growth will outpace its output.
In these circumstances, the aggregate GDP might be rising but the economy is less efficient. More people mean more consumption, but a decline means they’re producing less. That tends to indicate a declining quality of life, a mark of reversing progress. …[Continue Reading]