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Mexico's crisis: looking back to assess the future

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  • David M. Gould

Abstract

Mexico's most recent economic crisis took many in the international business community by surprise. In early December 1994, the Blue Chip consensus forecast for 1995 Mexican real GDP growth was 3.8 percent. A few weeks later, on December 20, the devaluation of the Mexican peso rocked international financial markets. What first appeared to be a minor correction in Mexico's nominal exchange rate quickly developed into a broader financial crunch felt in and outside Mexico. The Mexican government now expects the country's real GDP to fall about 3 percent in 1995; some private economists suggest an even greater decline.

Suggested Citation

  • David M. Gould, 1995. "Mexico's crisis: looking back to assess the future," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q II, pages 2-12.
    • Handle: RePEc:fip:fedder:y:1995:i:qii:p:2-12
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    References listed on IDEAS

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    1. Sebastian Edwards, 1995. "Trade Policy, Exchange Rates, and Growth," NBER Chapters, in: Reform, Recovery, and Growth: Latin America and the Middle East, pages 13-52, National Bureau of Economic Research, Inc.
    2. Albert O. Hirschman, 1968. "The Political Economy of Import-Substituting Industrialization in Latin America," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 82(1), pages 1-32.
    3. David M. Gould, 1992. "Free trade agreements and the credibility of trade reforms," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q I, pages 17-27.
    4. Staiger, Robert W & Tabellini, Guido, 1987. "Discretionary Trade Policy and Excessive Protection," American Economic Review, American Economic Association, vol. 77(5), pages 823-837, December.
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    Cited by:

    1. Sheng, Xuguang Simon & Sukaj, Rubena, 2021. "Identifying external debt shocks in low- and middle-income countries," Journal of International Money and Finance, Elsevier, vol. 110(C).

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