Like the rest of the poor periphery, Mexico had to deal with de-industrialization forces between 1750 and 1913, those critical 150 years when the economic gap between the industrial core and the primary-product-producing periphery widened to such huge dimensions. Yet, from independence to mid-century Mexico did better on this score than did most countries around the periphery. This paper explores the sources of Mexican exceptionalism with de-industrialization. It decomposes those sources into those attributable to productivity events in the core and to globalization forces connecting core to periphery, and to those attributable to domestic forces specific to Mexico. It uses a neo-Ricardian model (with non-tradable foodstuffs) to implement the decomposition, and advocates a price dual approach, and develops a new price and wage data base 1750-1878. There were three forces at work that account for Mexican exceptionalism: first, the terms of trade and Dutch disease effects were much weaker; second, Mexico maintained secular wage competitiveness with the core; and third, Mexico had the autonomy to devise effective ways to foster industry. The first appears to have been the most important.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
12316.
Length: Date of creation: Jun 2006 Date of revision: Handle: RePEc:nbr:nberwo:12316
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Find related papers by JEL classification: F1 - International Economics - - Trade N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services O2 - Economic Development, Technological Change, and Growth - - Development Planning and Policy
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