TFP News Shock Drives Canadian GDP Growth, Demand Shock Dominates Short-Term
The article identifies the two main factors that affect Canada's GDP movement from 1981 to 2011. By using a flexible method, the researchers found that TFP news shock drives GDP in the medium term, creating positive effects on the economy. In the short term, demand shock plays a significant role, although its exact source is unclear. These findings hold true even when using different identification strategies and variables.