Canada Re: Demand-Productivity Nexus

[Gernot Kohler <gernot.kohler@xxxxxxxxxxxxxxx>]

On Sat, 24 Feb 1996, Leigh Harkness wrote:

.....(concerning the high correlation between real wages and aggregate
productivity, you suggested:>
.........>
> > a third factor "Z" causes p and w to be either both low, or both high.
.........>
> I would suggest that you consider aggregate demand.
.........>

Here is a Canadian study which supports this view.
An econometric Post Keynesian study of Canada 1961 - 1988 concludes that

"The impact of the real wage on employment (and on productivity)
continues to be positive..." (p.186); and:

"...the results appear to support the Kaldorian effect of demand on
productivity..." (p. 185)

(My translation. Mario Seccareccia, "Salaire minimum, emploi et
productivite dans une perspective post-Keynesienne,"
_L'Actualite economique_ (Canada), vol. 67, no. 2 (juin 1991).

There are additional Canadian studies from the 1980s, which point in a
similar direction -- Helliwell (1984), Sharpe (1985) (see p. 185) and
others.

--Gernot Kohler