External Shocks, Structural Change, and Economic Growth in Mexico, 1979-2006
AbstractThis paper estimates the effects of external constraints on growth and investment in the Mexican economy, and how those effects have changed since the economic liberalization of the 1980s and the formation of NAFTA in 1994. Shocks to net financial inflows, world oil prices, the U.S. growth rate, and the real value of the peso explain most of the fluctuations in Mexico’s annual growth since 1979 (with structural breaks in some of these effects due to liberalization or NAFTA). Both Hausman weak exogeneity tests and simultaneous equations estimates generally support the view that growth drives investment but not the other way around, in the short run. Inflows of foreign direct investment have positive effects on investment, but the coefficients are small and their statistical significance is marginal.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Political Economy Research Institute, University of Massachusetts at Amherst in its series Working Papers with number wp157.
Date of creation: 2007
Date of revision:
Mexican economy; external shocks; economic growth; investment function; financial inflows; real exchange rates;
Other versions of this item:
- Robert A. Blecker, 2008. "External Shocks, Structural Change, and Economic Growth in Mexico 1979–2006," Working Papers 2008-04, American University, Department of Economics.
- O54 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- E22 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Luis Miguel Galindo & Jaime Ros, 2008. "Alternatives to inflation targeting in Mexico," International Review of Applied Economics, Taylor and Francis Journals, vol. 22(2), pages 201-214.
- Alicia Puyana, 2006. "Mexican Oil Policy and Energy Security Within NAFTA," International Journal of Political Economy, M.E. Sharpe, Inc., vol. 35(2), pages 72-97, June.
- Robert S. Chirinko, 1992.
"Business Fixed Investment Spending: A Critical survey of Modeling Strategies, Empirical Results, and Policy Implications,"
9213, Harris School of Public Policy Studies, University of Chicago.
- Robert S. Chirinko, 1993. "Business fixed investment spending: a critical survey of modeling strategies, empirical results, and policy implications," Research Working Paper 93-01, Federal Reserve Bank of Kansas City.
- Guillermo A. Calvo & Enrique G. Mendoza, 1996.
"Mexico's balance-of-payments crisis: a chronicle of death foretold,"
International Finance Discussion Papers
545, Board of Governors of the Federal Reserve System (U.S.).
- Calvo, Guillermo A. & Mendoza, Enrique G., 1996. "Mexico's balance-of-payments crisis: a chronicle of a death foretold," Journal of International Economics, Elsevier, vol. 41(3-4), pages 235-264, November.
- Ravn, M.O. & Uhlig, H., 2002.
"On adjusting the Hodrick-Prescott Filter for the frequency of observations,"
Open Access publications from University College London
http://discovery.ucl.ac.u, University College London.
- Morten O. Ravn & Harald Uhlig, 2002. "On adjusting the Hodrick-Prescott filter for the frequency of observations," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 371-375.
- Kwiatkowski, Denis & Phillips, Peter C. B. & Schmidt, Peter & Shin, Yongcheol, 1992.
"Testing the null hypothesis of stationarity against the alternative of a unit root : How sure are we that economic time series have a unit root?,"
Journal of Econometrics,
Elsevier, vol. 54(1-3), pages 159-178.
- Denis Kwiatkowski & Peter C.B. Phillips & Peter Schmidt, 1991. "Testing the Null Hypothesis of Stationarity Against the Alternative of a Unit Root: How Sure Are We That Economic Time Series Have a Unit Root?," Cowles Foundation Discussion Papers 979, Cowles Foundation for Research in Economics, Yale University.
- Kwiatkowski, D. & Phillips, P.C.B. & Schmidt, P., 1990. "Testing the Null Hypothesis of Stationarity Against the Alternative of Unit Root : How Sure are we that Economic Time Series have a Unit Root?," Papers 8905, Michigan State - Econometrics and Economic Theory.
- Breusch, T S & Pagan, A R, 1980. "The Lagrange Multiplier Test and Its Applications to Model Specification in Econometrics," Review of Economic Studies, Wiley Blackwell, vol. 47(1), pages 239-53, January.
- Gary Clyde Hufbauer & Jeffrey J. Schott, 2005. "NAFTA Revisited: Achievements and Challenges," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 332, 1st quart.
- Juan Carlos Moreno-Brid, 1999. "Mexico's Economic Growth and the Balance of Payments Constraint: A cointegration analysis," International Review of Applied Economics, Taylor and Francis Journals, vol. 13(2), pages 149-159.
- Ebrima Faal, 2005. "GDP Growth, Potential Output, and Output Gaps in Mexico," IMF Working Papers 05/93, International Monetary Fund.
- Chirinko, Robert S. & Fazzari, Steven M. & Meyer, Andrew P., 1999. "How responsive is business capital formation to its user cost?: An exploration with micro data," Journal of Public Economics, Elsevier, vol. 74(1), pages 53-80, October.
- Julio López Gallardo & Juan Carlos Moreno-Brid & Martín Puchet Anyul, 2006. "Financial Fragility And Financial Crisis In Mexico," Metroeconomica, Wiley Blackwell, vol. 57(3), pages 365-388, 07.
- Rudiger Dornbusch & Alejandro Werner, 1994. "Mexico: Stabilization, Reform, and No Growth," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(1), pages 253-316.
- Penelope Pacheco-López & A.P. Thirlwall, 2004. "Trade Liberalisation in Mexico: Rhetoric and Reality," Studies in Economics 0403, Department of Economics, University of Kent.
- Manuel Ramos Francia & Daniel Chiquiar, 2004. "Bilateral Trade and Business Cycle Synchronization: Evidence from Mexico and United States Manufacturing Industries," Working Papers 2004-05, Banco de México.
- Robert A. Blecker, 2006.
"The Economic Consequences of Dollar Appreciation for US Manufacturing Investment: A Time-Series Analysis,"
2006-07, American University, Department of Economics.
- Robert A. Blecker, 2007. "The Economic Consequences of Dollar Appreciation for US Manufacturing Investment: A Time-Series Analysis," International Review of Applied Economics, Taylor and Francis Journals, vol. 21(4), pages 491-517.
- Robert A. Blecker, 1996. "NAFTA, the Peso Crisis, and the Contradictions of the Mexican Economic Growth Strategy," SCEPA Working Papers 1996-04, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
- Rudger Dornbusch & Ilan Goldfajn & Rodrigo O. Valdés, 1995. "Currency Crises and Collapses," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(2), pages 219-294.
- Isaac, Sánchez Juárez, 2011.
"Una interpretación sobre el bajo crecimiento económico en México
[One interpretation of the low economic growth in Mexico]," MPRA Paper 38101, University Library of Munich, Germany.
- Isaac Leobardo Sánchez Juárez, 2011. "Una interpretación sobre el bajo crecimiento económico en México," Estudios Regionales en EconomÃa, PoblaciÃ³n y Desarrollo. Cuadernos de trabajo de la Universidad AutÃ³noma de Ciudad JuÃ¡rez. 1, Cuerpo Académico 41 de la Universidad Autónoma de Ciudad Juárez, revised 09 Dec 2012.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Judy Fogg).
If references are entirely missing, you can add them using this form.