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dc.contributor.authorMorel, Louisen_US
dc.description.abstractThe author constructs a measure of foreign activity that takes into account the composition of foreign demand for Canadian exports. It has a number of interesting features. First, the foreign activity measure captures both the composition of demand in the United States (by including components of U.S. private final domestic demand) and economic activity outside of the United States. Second, its coefficients have been estimated over the sample period 1981-2009 controlling for the effect of changes in relative prices. Third, compared with the Bank's previous U.S. activity index (introduced in the July 2009 Monetary Policy Report), the foreign activity measure provides some improvements for forecasting Canadian exports, especially at longer horizons. For instance, at eight quarters ahead, the gain in terms of forecast accuracy is as much as 22 per cent. Finally, the foreign activity measure helps to explain why Canadian exports dropped by 20 per cent during the global recession of 2008-09 and have only partially recovered since that time.en_US
dc.publisherBank of Canada Ottawaen_US
dc.relation.ispartofseriesBank of Canada Discussion Paper 2012-1en_US
dc.subject.keywordBalance of payments and componentsen_US
dc.subject.keywordExchange ratesen_US
dc.subject.keywordRecent economic and financial developmentsen_US
dc.titleA foreign activity measure for predicting Canadian exportsen_US
dc.typeWorking Paperen_US
Appears in Collections:Bank of Canada Discussion Papers

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