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The Role of NAFTA in the Economic Development of Mexico: Results from Modern Data


  • Stefano Chioetto
  • Kishore G Kulkarni


The paper analyzes certain crucial aspects like, effect of NAFTA (North American Free Trade Agreement) on the Mexican economy after 13-15 years of its advent and benefits enjoyed by the participants as a result of economic integration. By analyzing the effects of NAFTA, the paper attempts to test the validity of economic theories on international trade. While there are some profuse criticism of NAFTA on either side of the border, it is found that the improvement of labor conditions, in terms of more jobs and a higher wage rate in Mexico, is a significant gain from NAFTA. The paper consists of data analysis and uses some prior theoretical arguments such as that of Factor Price Equalization.

Suggested Citation

  • Stefano Chioetto & Kishore G Kulkarni, 2007. "The Role of NAFTA in the Economic Development of Mexico: Results from Modern Data," The IUP Journal of Applied Economics, IUP Publications, vol. 0(3), pages 40-58, May.
  • Handle: RePEc:icf:icfjae:v:06:y:2007:i:3:p:40-58

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    References listed on IDEAS

    1. Barone-Adesi, Giovanni & Whaley, Robert E, 1987. " Efficient Analytic Approximation of American Option Values," Journal of Finance, American Finance Association, vol. 42(2), pages 301-320, June.
    2. Merton, Robert C., 1976. "Option pricing when underlying stock returns are discontinuous," Journal of Financial Economics, Elsevier, vol. 3(1-2), pages 125-144.
    3. Black, Fischer & Scholes, Myron S, 1973. "The Pricing of Options and Corporate Liabilities," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 637-654, May-June.
    4. Peter Carr & Robert Jarrow & Ravi Myneni, 2008. "Alternative Characterizations Of American Put Options," World Scientific Book Chapters,in: Financial Derivatives Pricing Selected Works of Robert Jarrow, chapter 5, pages 85-103 World Scientific Publishing Co. Pte. Ltd..
    5. Geske, Robert & Roll, Richard, 1984. " On Valuing American Call Options with the Black-Scholes European Formula," Journal of Finance, American Finance Association, vol. 39(2), pages 443-455, June.
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