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Catch-up growth followed by stagnation: Mexico, 1950–2010

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  • Timothy J. Kehoe
  • Felipe Meza

Abstract

In 1950 Mexico entered an economic takeoff and grew rapidly for more than 30 years. Growth stopped during the crises of 1982?1995, despite major reforms, including liberalization of foreign trade and investment. Since then growth has been modest. We analyze the economic history of Mexico 1877? 2010. We conclude that the growth 1950?1981 was driven by urbanization, industrialization, and education and that Mexico would have grown even more rapidly if trade and investment had been liberalized sooner. If Mexico is to resume rapid growth ? so that it can approach U.S. levels of income ? it needs further reforms.

Suggested Citation

  • Timothy J. Kehoe & Felipe Meza, 2011. "Catch-up growth followed by stagnation: Mexico, 1950–2010," Working Papers 693, Federal Reserve Bank of Minneapolis.
    • Handle: RePEc:fip:fedmwp:693
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    Cited by:

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    2. Asturias, Jose & Hur, Sewon & Kehoe, Timothy J. & Ruhl, Kim J., 2016. "The interaction and sequencing of policy reforms," Journal of Economic Dynamics and Control, Elsevier, vol. 72(C), pages 45-66.
    3. Chang, Roberto & Fernández, Andrés & Gulan, Adam, 2017. "Bond finance, bank credit, and aggregate fluctuations in an open economy," Journal of Monetary Economics, Elsevier, vol. 85(C), pages 90-109.
    4. Delalibera, Bruno R. & Pereira, Luciene & Rios, Heron & Serrano-Quintero, Rafael, 2024. "Capital misallocation and economic development in a dynamic open economy," Journal of Economic Dynamics and Control, Elsevier, vol. 168(C).
    5. Daniela Costa & Timothy J. Kehoe & Gajen Raveendranathan, 2016. "The Stages of Economic Growth Revisited: Part 1: A General Framework and Taking Off into Growth," Economic Policy Paper 16-5, Federal Reserve Bank of Minneapolis.
    6. Sangeeta Pratap & Carlos Urrutia & Felipe Meza, 2014. "Credit, Misallocation and TFP: The case of Mexico (2003-2010)," 2014 Meeting Papers 701, Society for Economic Dynamics.
    7. Felipe Meza & Sangeeta Pratap & Carlos Urrutia, 2014. "Credit, Sectoral Misallocation and TFP: The Case of Mexico 2003-2010," Working Papers 1402, Centro de Investigacion Economica, ITAM.
    8. De La Peña, Rogelio & García, Ignacio, 2023. "Untangling crises: GFC and COVID-19 through the lens of a DSGE model," Latin American Journal of Central Banking (previously Monetaria), Elsevier, vol. 4(2).
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    10. Edmar Bacha & Regis Bonelli, 2015. "Coincident growth collapses: Brazil and Mexico since the early 1980s," Textos para Discussão 30, Instituto de Estudos de Política Econômica.

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    More about this item

    JEL classification:

    • N16 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Latin America; Caribbean
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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