External Shocks, Structural Change, and Economic Growth in Mexico, 1979–2007

Blecker, Robert A.

doi:10.1016/j.worlddev.2008.10.004

Cited by 56 publications

(40 citation statements)

References 19 publications

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“…Recent research supports the view that the negative effect of real appreciation on growth in the Mexican economy is not only important as we shall see but has increased since trade liberalization and especially since the North American Free Trade Agreement went into effect in 1994 (Galindo and Ros, 2008;Blecker, 2009;11 It is worth noting that this conclusion applies to the period 2002-2013, when the regime was in operation in all five countries of the IT group, but is sensitive to the particular period considered. Also, over this period, Mexico is in fact the only country in the group of inflation targeters that records a moderate real depreciation as a result of the shock of 2008-2009 (or, more precisely, Lehman's collapse).…”

Section: Real Appreciation and Slow Growthsupporting

confidence: 76%

“…Between 1996-2000and 2003-2007s GDP growth rate fell by 2.1 percentage points (from around 5% in the first period to 3% in the second one). Blecker (2009) estimates that the real appreciation of the peso (of around 10%) between these two periods reduced the growth rate by as much as 1.3 percentage points. 13 Ibarra (2010Ibarra ( , 2013 also finds a very significant effect of the real exchange rate on investment even after controlling for industrial production and exports, which suggests the presence of an important 'profitability effect' of the real exchange rate.…”

Section: Real Appreciation and Slow Growthmentioning

confidence: 99%

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Central Bank Policies in Mexico: Targets, Instruments, and Performance

Ros¹

2015

Comp Econ Stud

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The central argument of this paper is that in pursuing low inflation as its single and exclusive goal, and given some characteristics of the Mexican economy -a large degree of trade openness, a relatively high pass through of exchange rate movements into prices, and a low direct sensitivity of aggregate demand to interest ratesmonetary policy has generated a recurrent tendency toward real exchange rate appreciation with very adverse effects on economic growth. The paper also examines central bank's intervention in the foreign exchange market and the effectiveness of sterilized intervention in affecting the real exchange rate and potentially overcoming the tendency to real appreciation.

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Section: Real Appreciation and Slow Growthsupporting

confidence: 76%

Section: Real Appreciation and Slow Growthmentioning

confidence: 99%

Central Bank Policies in Mexico: Targets, Instruments, and Performance

Ros¹

2015

Comp Econ Stud

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“…The period under study was characterized by marked fluctuations in the growth rate which were closely related to variations in the U.S. growth rate. In fact, changes in U.S. growth have been one of the factors explaining the variation in Mexico's growth rate since the formation of the North American Free Trade Agreement (NAFTA) in 1994 (Blecker 2008). The economy bounced back and resumed growth in the following years, but another sharp decline ensued in 2009 as a consequence of the economic crisis in Europe and the U.S.…”

Section: Economic Growthmentioning

confidence: 99%

Growth, Employment, and Poverty in Latin America

Cruces

Fields

Jaume

et al. 2017

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and started work in Helsinki, Finland, in 1985. The mandate of the institute is to undertake applied research and policy analysis on structural changes affecting developing and transitional economies, to provide a forum for the advocacy of policies leading to robust, equitable, and environmentally sustainable growth, and to promote capacity strengthening and training in the field of economic and social policymaking. Its work is carried out by staff researchers and visiting scholars in Helsinki and via networks of collaborating scholars and institutions around the world. It is permitted to reuse, share and adapt this work, subject to the following terms:Attribution -appropriate credit is given to the original work, the copyright holder and creator, and any changes made to the work are properly indicated.Non-Commercial -the work, or any adaptation of the work, may not be used, distributed or reproduced in any format, by any means, for commercial purposes.Share-Alike -the work, or any adaptation of the work is distributed under the same licence terms as the original, with a URL link provided to the licence.Enquiries concerning use outside the terms of the Creative Commons licence should be sent to the Rights Department, Oxford University Press, at the above address or to academic.permissions@oup.com. Links to third party websites are provided by Oxford in good faith and for information only. Oxford disclaims any responsibility for the materials contained in any third party website referenced in this work.Printed and bound by CPI Group (UK) Ltd, Croydon, CR0 4YY ForewordThe motivation behind this piece of research was cemented during a meeting attended by Professor Gary Fields-one of the co-editors of this book-and myself in mid-2013 where we discussed in depth the linkages between economic growth, changing employment conditions, and the reduction of poverty. Gary has been working on the frontier of our profession on employment and development issues all of his academic career, and he pointed to new inroads and data to be explored within the growth-employment-poverty nexus, focusing on Latin America.At the time of our exploratory discussions the target date for completion of the UN Millennium Development Goals was looming, with the number one goal-to halve between 1990 and 2015 the proportion of people living on less than 1 dollar a day-having already been achieved. The new Post-2015 Development Agenda, since adopted, was under intense debate. Leading the charge among the Sustainable Development Goals is the aim to end poverty in all its forms everywhere, followed closely by the SDG to promote inclusive and sustainable economic growth, full and productive employment, and decent work for all. Thus the proposed research could not have been more timely for the international agenda. And more so as UNU-WIDER was then launching a new research programme-focusing on the three development challenges of transformation, inclusion, and sustainability-wherein work on the growthemployment-poverty nexus was a straightforward fit....

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“…The negative sign indicates that appreciation of the peso increases the probability that a metropolitan downturn will occur. Similarly, Blecker (2009) finds that peso appreciation reduces economic growth in Mexico at the national level. Other studies have also documented similar exchange rate effects in the export processing sectors of several urban economies in northern Mexico (Coronado et al, 2004;Fullerton and Torres-Ruiz, 2004;Cañas et al, 2007).…”

Section: Estimation Resultsmentioning

confidence: 98%

Yield Spreads, The Exchange Rate, and Recession Predictability for Northern Mexico Border Economies

Fullerton

Rojo²

2018

Asian Journal of Economic Modelling

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Article History JEL Classification:E32, Business cycles, E43, Interest rates, R15, Regional econometric models.Prior research suggests that the yield spread between long-term and short-term interest rates contains information regarding the likelihood of future recessions. Linkages between the yield spread and regional business cycles in emerging economies have, to date, received little attention. This study employs yield spreads for Mexico and for the United States, as well as a real exchange rate index, as potential predictors of recessions in eight metropolitan economies located in northern Mexico. The results suggest that, in most cases, the United States yield spread provides early warning signals of potential economic downturns, as does the real exchange rate index. Contribution/Originality:This study contributes to the existing literature on yield curves and recession predictability by amplifying the framework to include a currency market measure as well as international interest rate variables. It is one of very few studies that have applied this methodology to border region metropolitan economies.

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External Shocks, Structural Change, and Economic Growth in Mexico, 1979–2007

Cited by 56 publications

References 19 publications

Central Bank Policies in Mexico: Targets, Instruments, and Performance

Central Bank Policies in Mexico: Targets, Instruments, and Performance

Growth, Employment, and Poverty in Latin America

Yield Spreads, The Exchange Rate, and Recession Predictability for Northern Mexico Border Economies

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