Date/Time
Date(s) - 18/03/2026
11:30 am - 12:30 pm

Ana Davreux, Alumni and Economist with the Government of Canada, will present to our graduate students and faculty in KTH 334

Ana Davreux is an economist with the Chief Economist Office at ISED. She has played a key role on several files, including ISED’s contribution to the development of Build Canada Homes and the department’s industrial housing strategy. Prior to working at ISED, she worked as an Economic Research Consultant for the World Bank. As well, she has an MA in Economic Policy from McMaster University and a BA from Bishops University.

She will be presenting, “Real estate, investment, and financial constraints,” joint with Peter Foltin and Aldo Sandoval-Hernández who will facilitate discussions.

Joint Authors and Co-facilitators

Peter Foltin is an economic advisor at ISED’s Chief Economist Office. Before joining ISED, he was a research advisor at ESDC and an assistant professor of Economics at the University of Toronto. His primary research interests include the topics of productivity, green transition, game theory, and labour economics. Peter has a MA in Economics from the University of Western Ontario, a MSc in Mathematics from the University of Toronto and BSc from McMaster University.

Aldo Sandoval-Hernández, PhD is an economic advisor at ISED’s Chief Economist Office. Previously, he worked at the Office of the Chief Economist at GAC and served as a postdoctoral researcher at the University of Sussex. His research interests are in international trade, economic geography, and industrial organization, with a focus on new exporter dynamics, firm-level responses to external shocks, regulatory intensity and trade, and innovation spillovers. He holds a PhD in economics from Western University.

Abstract

Canada has recently been grappling with two major economic issues: stagnant productivity and a housing affordability crisis. Chronic underinvestment in productivity-enhancing assets, such as machinery, equipment, and intellectual property, is a key factor in Canada’s productivity woes, and the problem has gotten worse as investment in these assets has fallen from 8.9% of GDP in 1998 to 5.6% in 2024. At the same time, Canada’s housing affordability crisis has emerged despite leading the G7 in residential investment since 2015. In fact, residential investment more than doubled from 4.3% in 2000 to 9.4% in 2021, before easing to 7.6% in 2024. More than half of this increase came from transaction-related spending, such as renovations and ownership transfer costs. This shift raises concerns that speculation on the housing market has crowded out investment in assets critical for long-term growth. To better understand these patterns, we employ a firm-dynamics model with endogenous innovation decisions under financing constraints. Counterfactual simulations yield three key results: (1) young firms are more likely to pursue disruptive innovation that boosts productivity, (2) tighter financial constraints reduce entry, competition, and the risk-taking of young firms, and (3) financial frictions slow firm-level productivity growth, weakening aggregate productivity growth.

Learn more about Ana’s work and connect with her through her professional website.