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Competitiveness and Growth of the Mexican Economy

  • Daniel Chiquiar
  • Manuel Ramos Francia

We address the role that deep, structural factors may have as determinants of Mexico’s economic growth. We argue that Mexico’s poor growth performance appears to be associated not only with shorter-run events such as the "lost decade" of the eighties, but also with supply-side features of the economy that have been present for at least four decades. Mexico’s low competitiveness and poor growth potential seem to reflect an institutional framework that tends to support rigid, non-competitive market structures, and incentives that promote the allocation of resources towards unproductive rent-seeking activities relatively more than into investment, production, productivity, and adoption of superior technologies. We present examples of input markets where we believe these issues are central. We conclude that solving this situation requires microeconomic policies that lead to fundamental changes in the incentive structure of the economy.

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File URL: http://www.banxico.org.mx/publicaciones-y-discursos/publicaciones/documentos-de-investigacion/banxico/%7BA07F4B14-3BC3-2B7C-361B-97DA7C4296CF%7D.pdf
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Paper provided by Banco de México in its series Working Papers with number 2009-11.

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Date of creation: Nov 2009
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Handle: RePEc:bdm:wpaper:2009-11
Contact details of provider: Web page: http://www.banxico.org.mx

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