Abstract
Canadian income per capita has been, and continues to be, lower than American income per capita. The search for convergence opportunities, and scapegoats, has focused on perceived weaknesses within the Canadian manufacturing sector. In this paper quantitative evidence is presented which indicates that a sample of Canadian manufacturing firms have traditionally responded to changes in their input prices in a manner consistent with cost minimization and theories of induced innovation. These findings are inconsistent with claims of weakness and failure within the Canadian manufacturing sector. Journal of Economic Literature Classification Numbers: D21, L60, N60.
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