Excerpt: Power Play

This is an excerpt from Power Play: Energy and Manufacturing in North America, and it is taken from unconnected page proofs. This book tells the story of the energy-manufacturing nexus from the perspective of Canada, Mexico, and the United States, and the region. Using model simulations, chapters discuss the energy boom and its macroeconomic implications for the three countries individually and the region. Contributions to the collection show that the energy boom in the United States could have a positive, although moderate, impact on GDP and manufacturing activity. In Canada, the positive direct and indirect effects on economic activity of the energy boom can be considerable, especially if infrastructure bottlenecks are relieved, and counter the negative impact on manufacturing activity from a stronger real exchange rate. In Mexico, the recent energy reforms have the potential to greatly boost long-term GDP and manufacturing activity, although effective implementation is key. Finally, the authors review how the changing energy landscape can affect the potential benefits of greater integration across the three North American economies.