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Concepts and Measurements of Economic Interdependence: The Case of the United States and Mexico

Author

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  • del Rosío Barajas-Escamilla María

    (Social Studies Department, El Colegio de la Frontera Norte, Tijuana, BC 22560, Mexico)

  • Kia Amir

    (Finance and Economics Department, Utah Valley University, Orem, UT 84058–5999, USA)

  • Sotomayor Maritza

    (Finance and Economics Department, Utah Valley University, Orem, UT 84058–5999, USA)

Abstract

We developed a theoretical model capable to analyze U.S. fiscal and monetary policy effects on Mexican exports in order to provide an alternative approach to the study of economic interdependence. The model was estimated for the sample period of 1980–2013. The existing literature evidences quantified interdependence through trade flows and ignores the role of the U.S. fiscal and monetary policies. This paper uses the concept of sensitivity, from the economic interdependence literature, to verify the long and short run relationships between the U.S. and Mexico in a context of trade integration. Our findings confirm Mexico’s sensitivity to unanticipated shocks in particular coming from the U.S. monetary policy, the exchange rate and the world oil price.

Suggested Citation

  • del Rosío Barajas-Escamilla María & Kia Amir & Sotomayor Maritza, 2016. "Concepts and Measurements of Economic Interdependence: The Case of the United States and Mexico," Global Economy Journal, De Gruyter, vol. 16(1), pages 63-90, March.
    • Handle: RePEc:bpj:glecon:v:16:y:2016:i:1:p:63-90:n:6
    DOI: 10.1515/gej-2015-0034
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    References listed on IDEAS

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    Cited by:

    1. Roman Matkovskyy, 2019. "Extremal Economic (Inter)Dependence Studies: A Case of the Eastern European Countries," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 17(3), pages 667-698, September.

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    More about this item

    Keywords

    economic interdependence; sensitivity; fiscal and monetary policies; Mexico; NAFTA;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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