Author Description

In the mid-1930's, the price of gold was fixed at $35 (U.S.) perounce. It stayed at that level until 1968, when the price wasfreed to follow market pressures. By the late 1970's, the pricehad soared to more than 10 times the old price. It appears thatthese price changes have had a significant impact on productivitytrends in gold mining in Ontario. Before 1968, with rising costsand a fixed price, the industry shrank, reduced investment, andconcentrated its remaining resources on the extraction of gold. With rising prices, however, mines began to look to the futureand directed their resources away from direct production and intodevelopment activities. Empirical evidence indicates that theresult was a sharp reversal, beginning in 1973, of the improvingproductivity trend of the earlier period.