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Financial Fragility And Financial Crisis In Mexico


  • Julio López Gallardo
  • Juan Carlos Moreno-Brid
  • Martín Puchet Anyul


The objective of this paper is to show how Mexico's strategy of financial deregulation and liberalization set the stage for the crisis that the country suffered in December 1994. The theoretical underpinning is Post-Keynesian, and more precisely, a Minsky-inspired analytical perspective extended to the open economy. In the first section the authors carry out a theoretical discussion dealing with some Post-Keynesian theories of the business cycle. A second section is devoted to examining and identifying the stylized facts in the evolution of the Mexican economy, with special emphasis on the interaction between the financial and real variables. In the last section the authors propose a simplified model which shows how and why a strategy of financial deregulation and liberalization may lead to financial fragility and to a crisis. Copyright © 2006 The Authors; Journal compilation © 2006 Blackwell Publishing Ltd.

Suggested Citation

  • 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, July.
  • Handle: RePEc:bla:metroe:v:57:y:2006:i:3:p:365-388

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    References listed on IDEAS

    1. Dutt, Amitava Krishna, 1984. "Stagnation, Income Distribution and Monopoly Power," Cambridge Journal of Economics, Oxford University Press, vol. 8(1), pages 25-40, March.
    2. Skott,Peter, 2008. "Conflict and Effective Demand in Economic Growth," Cambridge Books, Cambridge University Press, number 9780521066310, March.
    3. Pitelis, Christos, 1997. "On Kaldor and Pensions," Cambridge Journal of Economics, Oxford University Press, vol. 21(4), pages 469-482, July.
    4. Steindl, Josef, 1979. "Stagnation Theory and Stagnation Policy," Cambridge Journal of Economics, Oxford University Press, vol. 3(1), pages 1-14, March.
    5. Lavoie, Marc, 1995. "The Kaleckian Model of Growth and Distribution and Its Neo-Ricardian and Neo-Marxian Critiques," Cambridge Journal of Economics, Oxford University Press, vol. 19(6), pages 789-818, December.
    6. Dutt, Amitava Krishna, 1992. "Conflict inflation, distribution, cyclical accumulation and crises," European Journal of Political Economy, Elsevier, vol. 8(4), pages 579-597, December.
    7. Blecker, Robert A, 1989. "International Competition, Income Distribution and Economic Growth," Cambridge Journal of Economics, Oxford University Press, vol. 13(3), pages 395-412, September.
    8. Taylor, Lance, 1985. "A Stagnationist Model of Economic Growth," Cambridge Journal of Economics, Oxford University Press, vol. 9(4), pages 383-403, December.
    9. Skott, Peter, 1989. "Effective Demand, Class Struggle and Cyclical Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(1), pages 231-247, February.
    10. Peter Flaschel & Hans-Martin Krolzig, 2003. "Wage and Price Phillips Curves An empirical analysis of destabilizing wage-price spirals," Economics Papers 2003-W16, Economics Group, Nuffield College, University of Oxford.
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    Cited by:

    1. Dutrénit, gabriela & Capdevielle, Mario & Corona, Juan Manuel & Puchet, Martin & Santiago, Fernando & Vera-Cruz, Alexandre, 2010. "El sistema nacional de innovación mexicano: estructuras, políticas, desempeño y desafíos
      [The Mexican national innovation system: structures, policies, performance and challenges]
      ," MPRA Paper 31982, University Library of Munich, Germany.
    2. Robert Blecker, 2007. "External Shocks, Structural Change, and Economic Growth in Mexico, 1979-2006," Working Papers wp157, Political Economy Research Institute, University of Massachusetts at Amherst.
    3. repec:bla:metroe:v:68:y:2017:i:4:p:833-858 is not listed on IDEAS
    4. Robert A. Blecker, 2006. "Macroeconomic and Structural Constraints on Export-Led Growth in Mexico," Working Papers 2006-05, American University, Department of Economics.

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