The Orders-Shipments Mechanism in Canadian Producer Goods Industries

Abstract

This article tests the hypothesis of a variable lag of shipments of capital goods behind new orders, applied to three major Canadian industries producing mainly to order. This hypothesis, confirmed by earlier studies on American data, is corroborated on the Canadian data. Several supplementary conclusions are also drawn, including a suggestion that constraining the weights in the Almon lag distribution to zero at the beginning and end of the distribution may introduce distortion into the resulting estimates.

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