I will touch on productivity in my remarks this evening, but I would like to focus on another issue that also has a direct bearing on our standard of living - namely, our terms of trade, that is, the prices we get for our exports relative to the prices we pay for our imports.
When the prices of what we sell in world markets go up, or the prices of what we buy from the rest of the world go down, we are richer as a country. But changes in our terms of trade mean more than changes in real income and wealth. They also have significant implications for the allocation of resources within the economy.