Mexico and the United States: cycle synchronization,1980.1-2013.4

Eduardo Loría () and Emmanuel Salas ()
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Eduardo Loría: Center for Modeling and Economic Forecasting, School of Economics, Universidad Nacional Autónoma de México (UNAM). México, D.F.
Emmanuel Salas: Center for Modeling and Economic Forecasting, School of Economics, Universidad Nacional Autónoma de México (UNAM). México, D.F.

Ensayos Revista de Economia, 2015, vol. XXXIV, issue 1, 75-102

Abstract: We estimated the progressive, structural synchronization of the Mexican growth cycle with that of the US (total and industrial) for 1980.1-2013.4. By applying the Quandt-Andrews (1993) and Bai-Perron (2003) unknown-breakpoint tests, we identified that before 1994.4 there was no statistically significant relationship between the Mexican GDP growth cycle and the US industrial output cycle, but a weak (statistically significant) relationship with total US GDP cycle. However, since 1997.4 and particularly since 2001.2, there is a vast and increasing synchronization and determination from the US industrial cycle to the Mexican cycle (R2 = 0.96). The degrees of freedom of Mexican domestic economic policy have thus drastically decreased.

Keywords: Mexico-US growth cycles; synchronization; end-of-sample correction; unknown-breakpoint tests. (search for similar items in EconPapers)
JEL-codes: C24 F15 F62 (search for similar items in EconPapers)
Date: 2015
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