External Shocks, Structural Change, and Economic Growth in Mexico 1979–2006

Robert Blecker

No 2008-04, Working Papers from American University, Department of Economics

Abstract: This paper finds that shocks to net financial inflows, world oil prices, the U.S. growth rate, and the lagged real exchange rate explain most of the fluctuations in Mexico’s annual growth since 1979. The paper also estimates how the effects of these external constraints have changed since Mexico’s liberalization policies of the late 1980s and the formation of NAFTA in 1994. Estimates of an investment function and other tests show that growth drives investment but not conversely, in the short run. Inflows of foreign direct investment have positive effects on investment, but the coefficients are small and not always significant.

Keywords: Latin America; Mexico; external shocks; economic growth; investment; financial inflows (search for similar items in EconPapers)
JEL-codes: E22 F43 O11 O54 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2008-01
New Economics Papers: this item is included in nep-dev, nep-mac and nep-opm
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Citations: View citations in EconPapers (4)

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https://doi.org/10.17606/0t4h-jt39 First version, 2008 (application/pdf)

Related works:
Working Paper: External Shocks, Structural Change, and Economic Growth in Mexico, 1979-2006 (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:amu:wpaper:0408

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