Savings, Investment, and Growth in Mexico: Five Years After the Crisis

International Monetary Fund

No 1989/018, IMF Working Papers from International Monetary Fund

Abstract: Despite Mexico’s recent remarkable progress in adjusting its fiscal and external accounts and in restructuring its economy, the recovery of growth has remained elusive. This paper reviews some aspects of Mexico’s recent performance and suggests that systemic adjustment uncertainty, and policy conflicts between stabilization and real depreciation objectives, are among the factors that have contributed most to delaying the private sector’s investment response and preventing a sustainable recovery. The paper also assesses future growth prospects and resource mobilization needs, based on a growth model that fully incorporates the internal transfer problem and emphasizes solvency requirements.

Keywords: WP; exchange rate; capital flight; private sector; current account; structural adjustment; interest rate; investment volume index; cost of funds; savings-investment identity; GDP growth; Inflation; Real exchange rates; Capital outflows; Fiscal consolidation; North America (search for similar items in EconPapers)
Pages: 92
Date: 1989-01-01
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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1989/018

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