Exporting without growing: Investment, real currency appreciation, and export-led growth in Mexico

Carlos Ibarra

The Journal of International Trade & Economic Development, 2010, vol. 19, issue 3, 439-464

Abstract: Despite two positive developments - the rise of manufactured exports and a prolonged but eventually successful disinflation - Mexico failed to sustain a high rate of economic growth during its free-trade period 1988-2006. The paper argues that the proximate cause of Mexico's growth failure is the low dynamism of investment, which resulted from the high share of maquila (or assembly goods) in manufactured exports and the real appreciation of the peso during disinflation. The argument is supported by two strands of evidence: an aggregate-demand decomposition that measures the contributions of investment and exports to GDP growth, and the estimation by Johansen's methodology of two- and three-equation cointegration models that show the effect of manufactured exports and the real exchange rate on total investment.

Keywords: export-led growth; real currency appreciation; real exchange rate; investment determinants; Johansen's cointegration methodology; Mexico (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/09638190802593418 (text/html)
Access to full text is restricted to subscribers.

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:taf:jitecd:v:19:y:2010:i:3:p:439-464

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RJTE20

DOI: 10.1080/09638190802593418

Access Statistics for this article

The Journal of International Trade & Economic Development is currently edited by Pasquale Sgro, David E.A. Giles and Charles van Marrewijk

More articles in The Journal of International Trade & Economic Development from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().