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Resources, trade and debt: the case of Mexico


  • Chichilnisky, Graciela
  • Heal, Geoffrey
  • McLeod, Darryl


The paper studies a two-region economy , with two sectors and three factors of production : oil, capital and labor . The South exports oil in exchange for industrial goods from the North . There is a net capital inflow to the South . This equals the difference between its export revenues and import costs, and represents the South's indebtedness . This overseas borrowing finances the development of the oil sector : increased borrowing leads to higher oil supplies, to new levels of consumption and a new distribution of income in the South, as well as to new levels of exports from the North . The paper studies the macro impacts of changes in the value of the debt on both the borrowing and the lending regions . The results are illustrated by simulations with data for the U .S .A . and Mexico .

Suggested Citation

  • Chichilnisky, Graciela & Heal, Geoffrey & McLeod, Darryl, 1983. "Resources, trade and debt: the case of Mexico," MPRA Paper 8074, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:8074

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    References listed on IDEAS

    1. Barry Eichengreen & Jurgen von Hagen, 1996. "Fiscal Policy and Monetary Union: Is There a Tradeoff between Federalism and Budgetary Restrictions?," NBER Working Papers 5517, National Bureau of Economic Research, Inc.
    2. Tamim Bayoumi & Barry Eichengreen, 1995. "Restraining Yourself: The Implications of Fiscal Rules for Economic Stabilization," IMF Staff Papers, Palgrave Macmillan, vol. 42(1), pages 32-48, March.
    3. Wallace E. Oates, 1999. "An Essay on Fiscal Federalism," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1120-1149, September.
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    Cited by:

    1. Chichilnisky, Graciela, 1990. "Large and small models: their suitability for North-South issues," MPRA Paper 8354, University Library of Munich, Germany.
    2. Chichilnisky, Graciela, 1990. "Global models and North-South relations," MPRA Paper 8126, University Library of Munich, Germany.
    3. Chichilnisky, Graciela, 1985. "International trade in resources: a general equilibrium analysis," MPRA Paper 8356, University Library of Munich, Germany.

    More about this item


    Mexico; north-south; trade; debt; debt in developing nations; oil exportation; PEMEX; income distribution;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy


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