This article uses the censuses of 1842 of Canada East (modern‐day Quebec) and Canada West (modern‐day Ontario) to help explain the historical differences in living standards between Canada and the United States. The wage and price data contained in the censuses suggest a gap of 42 percent between Canada East and Canada West. We argue that Canada East was substantially poorer than the rest of Canada and, as it represented such a large proportion of the total population of the initial four Canadian provinces (over 35 percent), that relative poverty weighed heavily in determining the extent of differences in living standards between Canada and the United States. These findings change the perspective on the roots of the differences between the two countries. We propose that any research agenda trying to explain those differences should focus heavily on Quebec.
This paper explains why institutional quality impacts the productivity of investment. The existing empirical literature finds that a given level of investment creates more economic growth in more economically free countries. We draw on insights from Austrian economics, particularly the economic calculation debate and associated knowledge problems, to provide a theoretical explanation for why entrepreneurs are able to better value investment opportunities in more economically free countries which, in turn, leads to higher economic growth.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.