Trade, Productivity and Synchrony in Mexican and United States Manufacturing

Daniel Garces Diaz
Additional contact information
Daniel Garces Diaz: Bank of Mexico

No 41, 2018 Meeting Papers from Society for Economic Dynamics

Abstract: This paper examines the factors behind the evolving synchrony between U.S. and Mexican industries, specially since 2001, when U.S. manufacturing production began to stagnate. A stylized model is developed to explain the origin and evolution of the correlations at the zero and cyclical frequencies. TFP shocks cannot account for the changes in the relationship since 2001. They arose from an increase in the use of capital and intermediate inputs in Mexican manufacturing. The long-run correlations are closely related to the contributions of the different sectors to U.S. manufacturing production growth. For example, the Mexican manufacturing production index has its highest correlation with the U.S. semiconductors sector although the production of such goods is almost inexistent in Mexico. This suggests that the correlations reflect the response of the Mexican sectors to U.S. aggregate shocks, a hypothesis verified within a VAR analysis.

Date: 2018
New Economics Papers: this item is included in nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2018/paper_41.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:sed018:41

Access Statistics for this paper

More papers in 2018 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().