Industrial Adjustment: Context, Causes, Impacts and Methods for Analysis

Adjustement is an ongoing process by which factors of reallocated to equalize their returns in different uses. Adjustment occurs though market mechanisms or intrafirm reallocation of resources as a result of changes in terms of trade, government policies, resource availability, technological change, etc. These changes alter production opportunities and production, transaction and information costs, and consequently modify production functions, organizational design, etc. In this paper we define adjustment (section 2); review empirical estimates of the extent of adjustment in Canada and abroad (section 3); review selected features of the trade policy and adjustment context of relevance for policy formulation among which: slow growth, a shift to services, a shift to the Pacific Rim, the internationalization of production, investment distribution communications the growing use of NTB's, changes in foreign direct investment patterns, intrafirm and intraindustry trade, interregional trade flows, differences in micro economic adjustment processes of adjustment as between subsidiaries and Canadian companies (section 4); examine methodologies and results of studies of the impact of trade liberalization on jobs (section 5); and review the R. Harris general equilibrium model (section 6). Our conclusion emphasizes the importance of harmonizing commercial and domestic policies dealing with adjustment (section 7). We close with a bibliography of relevant publications.

The Macroeconomic Effects of Infrequent Information with Adjustment Costs

In the last decade, the potential macroeconomic effects of intermittent large adjustments in microeconomic decision variables such as prices, investment, consumption of durables or employment – a behavior which may be justified by the presence of kinked adjustment costs – have been studied in models where economic agents continuously observe the optimal level of their decision variable. In this paper, we develop a simple model which introduces infrequent information in a kinked adjustment cost model by assuming that agents do not observe continuously the frictionless optimal level of the control variable. Periodic releases of macroeconomic statistics or dividend announcements are examples of such infrequent information arrivals. We first solve for the optimal individual decision rule, that is found to be both state and time dependent. We then develop an aggregation framework to study the macroeconomic implications of such optimal individual decision rules. Our model has the distinct characteristic that a vast number of agents tend to act together, and more so when uncertainty is large. The average effect of an aggregate shock is inversely related to its size and to aggregate uncertainty. We show that these results differ substantially from the ones obtained with full information adjustment cost models.

Utilisation de systèmes d'information géographique pour l'évaluation des risques liés à la dégradation du pergélisol. Étude de cas : Tasiujaq, Nunavik, Québec

Les régions nordiques à pergélisol seront largement affectées par l'augmentation prévue des températures. Un nombre croissant d’infrastructures qui étaient autrefois construites avec confiance sur des sols gelés en permanence commencent déjà à montrer des signes de détérioration. Les processus engendrés par la dégradation du pergélisol peuvent causer des dommages importants aux infrastructures et entrainer des coûts élevés de réparation. En conséquence, le contexte climatique actuel commande que la planification des projets dans les régions nordiques s’effectue en tenant compte des impacts potentiels de la dégradation du pergélisol. Ce mémoire porte sur l’utilisation de systèmes d’information géographique (SIG) appliqués à l’évaluation du potentiel d’aménagement des territoires situés en milieu de pergélisol. En utilisant une approche SIG, l’objectif est d’élaborer une méthodologie permettant de produire des cartes d'évaluation des risques afin d’aider les collectivités nordiques à mieux planifier leur environnement bâti. Une analyse multi-échelle du paysage est nécessaire et doit inclure l'étude des dépôts de surface, la topographie, ainsi que les conditions du pergélisol, la végétation et les conditions de drainage. La complexité de l'ensemble des interactions qui façonnent le paysage est telle qu'il est pratiquement impossible de rendre compte de chacun d'eux ou de prévoir avec certitude la réponse du système suite à des perturbations. Ce mémoire présente aussi certaines limites liées à l’utilisation des SIG dans ce contexte spécifique et explore une méthode innovatrice permettant de quantifier l'incertitude dans les cartes d'évaluation des risques.

The costs of alcohol, illegal drugs, and tobacco in Canada, 2002.

Objective: The aim of this study was to estimate costs attributable to substance use and misuse in Canada in 2002. Method: Based on information about prevalence of exposure and risk relations for more than 80 disease categories, deaths, years of life lost, and hospitalizations attributable to substance use and misuse were estimated. In addition, substance-attributable fractions for criminal justice expenditures were derived. Indirect costs were estimated using a modified human capital approach. Results: Costs of substance use and misuse totaled almost Can. $40 billion in 2002. The total cost per capita for substance use and misuse was about Can. $1,267: Can. $463 for alcohol, Can. $262 for illegal drugs, and Can. $541 for tobacco. Legal substances accounted for the vast majority of these costs (tobacco: almost 43% of total costs; alcohol: 37%). Indirect costs or productivity losses were the largest cost category (61%), followed by health care (22%) and law enforcement costs (14%). More than 40,000 people died in Canada in 2002 because of substance use and misuse: 37,209 deaths were attributable to tobacco, 4,258 were attributable to alcohol, and 1,695 were attributable to illegal drugs. A total of about 3.8 million hospital days were attributable to substance use and misuse, again mainly to tobacco. Conclusions: Substance use and misuse imposes a considerable economic toll on Canadian society and requires more preventive efforts.