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External Shocks, Structural Change, and Economic Growth in Mexico, 1979-2007

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  • Blecker, Robert A.

Abstract

Summary This article finds that shocks to net financial inflows, world oil prices, the US growth rate, and the lagged real exchange rate explain most of the fluctuations in Mexico's annual growth since 1979. The article also estimates how the effects of these external constraints have changed since Mexico's liberalization policies of the late 1980s and the formation of NAFTA in 1994. Estimates of an investment function and other tests show that growth drives investment but not conversely, in the short run. Investment is driven mainly by oil prices and the accelerator effect; foreign direct investment has no significant impact.

Suggested Citation

  • Blecker, Robert A., 2009. "External Shocks, Structural Change, and Economic Growth in Mexico, 1979-2007," World Development, Elsevier, vol. 37(7), pages 1274-1284, July.
  • Handle: RePEc:eee:wdevel:v:37:y:2009:i:7:p:1274-1284
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    Citations

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    Cited by:

    1. Blecker, Robert A. & Ibarra, Carlos A., 2013. "Trade liberalization and the balance of payments constraint with intermediate imports: The case of Mexico revisited," Structural Change and Economic Dynamics, Elsevier, vol. 25(C), pages 33-47.
    2. Ibarra, Carlos A., 2011. "Capital Flows and Real Exchange Rate Appreciation in Mexico," World Development, Elsevier, pages 2080-2090.
    3. Carlos A. Ibarra & Robert A. Blecker, 2016. "Structural change, the real exchange rate and the balance of payments in Mexico, 1960–2012," Cambridge Journal of Economics, Oxford University Press, pages 507-539.
    4. Robert A. Blecker & Gerardo Esquivel, 2009. "NAFTA, Trade, and Development," Working Papers 2009-24, American University, Department of Economics.
    5. Lipford Jody W. & Yandle Bruce, 2011. "NAFTA, Environmental Kuznets Curves, and Mexico's Progress," Global Economy Journal, De Gruyter, pages 1-20.
    6. Robert A. Blecker, 2015. "Integration, Productivity, and Inclusion in Mexico: A Macro Perspective," Working Papers 2015-06, American University, Department of Economics.

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