Capital accumulation, economic growth and the balance-of-payments constraint: The case of Mexico, 1951-2014

Ignacio Perrotini Hernández (), Juan Alberto Vázquez-Muñoz () and María Isabel Angoa Pérez ()
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Ignacio Perrotini Hernández: Universidad Nacional Autónoma de México
Juan Alberto Vázquez-Muñoz: Universidad Autónoma de Puebla
María Isabel Angoa Pérez: Universidad Autónoma de México

Nóesis. Revista de Ciencias Sociales y Humanidades, 2019, vol. 28, 38-63

Abstract: After a critical assessment of both Thirlwall’s long-run growth model and Clavijo’s and Ros’s (2015) model where capital accumulation determines output growth, this paper displays an alternative model in which capital accumulation and the growth rate of capital productivity determine the long-run growth rate of output which is consistent with a constant position of the balance of payments as a percentage of GDP. Then, the latter is applied to inquire the causes accounting for Mexico’s low economic growth rate during 1982-2014. We conclude, on empirical grounds, that the sharp decline in the internal demand for domestic goods and both the rates of net capital accumulation and productivity played a major role in the slowdown of the Mexican economy. The income elasticities of the demand for exports and imports also played a role, albeit to a lesser extent.

Keywords: Capital accumulation; growth; balance of payments. (search for similar items in EconPapers)
JEL-codes: Z10 (search for similar items in EconPapers)
Date: 2019
Note: none
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Citations: View citations in EconPapers (1)

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