Why Have Economic Reforms in Mexico Not Generated Growth?

Timothy Kehoe and Kim Ruhl

No 16580, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Following its opening to trade and foreign investment in the mid-1980s, Mexico's economic growth has been modest at best, particularly in comparison with that of China. Comparing these countries and reviewing the literature, we conclude that the relation between openness and growth is not a simple one. Using standard trade theory, we find that Mexico has gained from trade, and by some measures, more so than China. We sketch out a theory in which developing countries can grow faster than the United States by reforming. As a country becomes richer, this sort of catch-up becomes more difficult. Absent continuing reforms, Chinese growth is likely to slow down sharply, perhaps leaving China at a level less than Mexico's real GDP per working-age person.

JEL-codes: F43 O47 P52 (search for similar items in EconPapers)
Date: 2010-12
New Economics Papers: this item is included in nep-dev and nep-opm
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Citations: View citations in EconPapers (55)

Published as Timothy J. Kehoe & Kim J. Ruhl, 2010. "Why Have Economic Reforms in Mexico Not Generated Growth?," Journal of Economic Literature, American Economic Association, vol. 48(4), pages 1005-27, December.

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