Tuesday, May 15, 2012

Canada vs US: What happened in the 90s?

I was playing around with Google's astounding Google Data Visualization tool [1] and I compared GDP per capital between Canada (my birthplace) and the US over the past forty years in US dollars.


That's one huge gap in the 90s. I assume it has to do with some exchange rate divergence and a purchasing power parity gap ...

Whatever the cause, the divergence starts @1990, but shortly after 2001 (9/11?) Canada US$ GDP/Capita skyrockets. The crash of 2008 by this measure is huge in the US, but immense in Canada. Now they're converging again even as Canada's currency seems to be ?overpriced ...

I don't see how to graph PPP adjusted GDP/person over this period, but that would be really neat.

Be neat to have an economist comment on this. For me it's mostly fun to play with this amazing tool. I suspect that some people made a lot of money based on those wild PPP fluctuations - whether directly by currency trading or indirectly through other measures. They don't seem to reflect fundamental changes in the US and Canadian economies.

PS. Incidentally, according to this tool, Bermuda is part of North America, but Mexico is not.

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