Analysis using the Bank of Canada’s main projection model – the Terms-of-Trade Economic Model (ToTEM) – illustrates how different types of shocks to the supply and demand for commodities impact the Canadian economy. 3 Regardless of the cause of a commodity-price increase, Canada’s improved terms of trade cause income, wealth and GDP to rise (Chart 11).
It will also be decisive in giving a direction to the historical evolution of Europe in the perspective of the “longue durée”. The historical stakes are important.