| Sumario: | Abstract. The substitution possibilities between Canadian imports, exports, and domestic inputs or outputs are modelled. Import demand and export supply functions are derived from a representation of the technology that is similar to Samuelson's GNP function and are estimated simultaneously with the demand and supply functions of the domestic factors or goods. Exports, investment goods, and consumption goods are found to be substitutes for each other in production. Furthermore, exports and investment goods are import-intensive, and the results indicate that a devaluation of the Canadian dollar would raise the return to capital and lower the return to labour.
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