IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

The impact of the Mexican crisis on trade, agriculture, and migration:

Listed author(s):
  • Robinson, Sherman
  • Burfisher, Mary E.
  • Thierfelder, Karen

This paper uses a two-country, computable general equilibrium (CGE), trade model to analyze the impact on Mexico and the U.S. of the precipitous peso depreciation in late 1994 and early 1995, and of the policy response to the crisis. The model includes explicit treatment of agricultural policies in the two countries, and of labor-market linkages, including rural-urban migration within Mexico and Mexico-U.S. migration. We explore “hard,” “medium,” and “soft” landing scenarios, which differ in the extent of assumed unemployment and fall in capacity utilization, and in the nature of the structural adjustment program in Mexico. For each scenario, we consider a range of balance-of-trade adjustments, and resulting changes in the equilibrium real exchange rate. The results indicate that both countries benefit from Mexico achieving a soft landing. It is important to achieve a new equilibrium exchange rate quickly, and overshooting is costly for both countries. The hard landing leads to major disruption of the Mexican economy and greatly increased migration to the U.S., while a soft landing yields very little additional migration. The structural adjustment program is good for Mexican agriculture, shifting resources into high productivity tradables such as fruits and vegetables. A protectionist U.S. response to the increase in Mexican exports hinders the structural adjustment process and leads to increased Mexico-U.S. migration.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by International Food Policy Research Institute (IFPRI) in its series TMD discussion papers with number 8.

in new window

Date of creation: 1995
Handle: RePEc:fpr:tmddps:8
Contact details of provider: Postal:
1201 Eye Street, NW, Washington, DC 20005-3915

Phone: 202-862-5600
Fax: 202-467-4439
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:fpr:tmddps:8. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.