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Since its appearance in 2020, Brazil and Mexico have been among the most affected countries in the world by covid-19. Their respective presidents, Jair Bolsonaro and Andrés Manuel López Obrador (known as AMLO), have played a leading role in specific policies during the pandemic. Their choices were both singular and counter- intuitive. On the health front, AMLO initially underplayed the seriousness of the situation, and the Brazilian president, Bolsonaro, defended a frankly negationist attitude, with a dramatic balance sheet, without his popularity being seriously affected. On the economic front, they have chosen policies that contradict not only each other but also their own supposed ideological stances. Bolsonaro, who is ranked on the far right, has implemented an emergency transfer program on a scale comparable to those of developed countries and the most massive the country has ever seen. Conversely, AMLO, considered a progressist, provided just a minimum policy package, maintaining his previous electoral program. By adopting a comparative approach and mobilizing a unique and diversified set of data, the objective of this paper is to explore these apparent contradictions. After having established the precise diagnosis of the policies implemented to deal with the crisis and the economic and health situation in the two countries during the 2020-2022 period, we propose an original interpretation grid of the central role played by the two presidents. [ABSTRACT FROM AUTHOR]

This paper performs a comparative analysis of the Chinese and Mexican production structures, through a descriptive study and using the methods of structural analysis on input-output tables of 1995 and 2011. During this period, the average annual per capita gross domestic product (gdp) growth in China amounted to 9.18%, while in Mexico it reached only 0.95%. Assuming that China's growth has been successful in this sense, then a mayor conclusion from this paper is that if Mexico wishes to reach high growth rates, the main element potentially useful to elaborate an efficacious strategy from China's experience is clear: To foster, from a proactive participation of the state, the development of key sectors which will constantly increase their multiplier effects, so that a mayor integration of the national economy is achieved, and the development and consolidation of the productive apparatus sufficient to support the generation of next-generation productive sectors. [ABSTRACT FROM AUTHOR]

The paper studies the decline of the labor income share (LIS) in Mexico during the 1990-2015 period. The decline is mostly explained by reductions within the economy's major sectors (including manufacturing, tradables, and non-tradables), rather than by a recomposition of value added towards sectors with low labor shares. In contrast to agriculture --where LIS fell due to a shift of labor force from self-employment to wage-employment-- in other major areas of the economy the fall in LIS is explained by reductions within the wage-employment sector. Econometric estimations indicate that parallel declines in the wage share and relative productivity of non-tradables and in the US manufacturing labor share all played a large role in the reduction of the manufacturing wage share in Mexico. More generally, the analysis suggests that the lagging productivity of the economy's informal non-tradable sector --itself a reflection of the country's low aggregate rate of economic growth-- is a crucial factor in the fall of LIS in the formal sectors. The paper concludes by discussing possible explanations for the paradox of the slow rate of economic growth in Mexico despite the rise in the profit share. [ABSTRACT FROM AUTHOR]

Historically, higher education is considered one of the main routes of upward social mobility. However, given the plurality of options offered by the education system at this level, there may be a distinctive pattern not only of socioeconomic origin but also of economic results after graduating from a specific higher education institution (hei), which can inhibit the promotion of social mobility through hei. Using data from the Intergenerational Social Mobility Module 2016, this paper analyzes whether the hei in Mexico promote the social mobility of their graduates. The results suggest a potential mediating effect of hei in the intergenerational transmission of wealth. This means that the wealth of the original household is an important determinant of the type of hei from which the respondents graduate, furthermore, the type of hei also explains part of the variation in the wealth of the current household of graduates. Specifically, individuals who reported having completed their university studies at the National Polytechnic Institute (ipn, Mexico) present the lowest intergenerational correlation of wealth, 0.18. In contrast, normal schools and the National Pedagogical University (upn, Mexico) have the highest intergenerational persistence rates, 0.48 and 0.47, respectively. Under these findings, it is argued that the type of hei from which individuals graduate can complement the explanation of the mechanisms of intergenerational persistence of wealth. [ABSTRACT FROM AUTHOR]

In contrast to other countries, in Mexico, there is no survey to numerically measure consumer inflation expectations. This paper reports the results of the application of a simple questionnaire that aims to obtain a first approximation of these expectations. The exercise also seeks to obtain information on the process of expectations formation through a controlled intervention, as well as to investigate which products have an effect on inflation expectations the most. Four groups were randomly formed: three that received information on past, present or expected inflation, and a control group with no additional information. Consistent with the literature, the results show that people have a higher inflation expectation than specialists. The experiment also reveals that providing information does affect and reduce inflation expectations. Finally, we find that inflation expectations depend mainly on everyday consumer products, such as food. [ABSTRACT FROM AUTHOR]

This paper presents a preliminary assessment of the various impacts of the fiscal reform undertaken by President Enrique Peña Nieto. First, the weaknesses and vulnerabilities of the fiscal structure that the new administration had to face are shown, in particular the dependence on oil revenues. The need for a fiscal reform that increased income, diminish fiscal evasion and labour informality was evident. In the second part of the paper the actual reform measures are discussed, as well as its various measurable impacts. It is particularly relevant the unexpected oil price drop and the government response to maintain gasoline prices and thus prevent fiscal revenues from declining, as well as the government’s repeated forecasting mistakes. Finally, it is concluded that in spite of being insufficient, Peña Nieto’s fiscal reform was successful in increasing the fiscal burden from 8.4% of gdp in 2012 to 13.1% in 2017. However, such increase in revenues was not enough to prevent the rise of the public debt in almost 10 percentage points of GDP, in spite of the fact that the government took the operational surpluses of Banco de México. [ABSTRACT FROM AUTHOR]

Background: "Middle class" is a polysemic social category. In methodological terms, it is similar to that of poverty, both without consensus according to literature. A comprehensive review of literature is made in this paper, emphasizing on single and multidimensional methodologies, identifying non-consensual findings when using and building thresholds and different dimensions. Methodology: This paper proposes identification of Mexican Middle Class according to a multidimensional perspective, consistent with Coneval's multidimensional poverty measurement method (2009), where income is a necessary but not enough condition of security and none vulnerability. "Latent-class models" are built based upon the Coneval's Rights and Well-being indicators that identified the ratio of population that could be considered middle classes. Five categories are obtained: population in multidimensional poverty, vulnerable population by income, vulnerable population due to social deprivation, middle classes and rich population. Results: Among the main findings, there is evidence that Mexico continues to be a country of poor, rather than middle class people. The number of people in poverty is 2.3 times greater than that of middle class, while the status and conditions of life guaranteeing security and not economic vulnerability, characteristic of the middle class, is only due for a little more of a quarter of the total population, 27.5%. This paper presents findings on the evolution of the middle class, which grows between 2000-2006, before the food and economic-financial crisis of 2006 and 2008, but never reaches levels above 50%. After crisis years, it begins its descent again to levels similar to 1994, showing its vulnerability to economic crisis. Conclusions: As a conclusion sustainability of middle classes over time in Mexico depends both on an effective and efficient policy to fight against poverty, and on specific policy about middle classes, which actually in Mexico and Latin American countries does not exist. This means that the broadest layers of the population, in the same way as in developed countries, have access to a living wage that guarantees well-being, effective health services, quality education, access to the credit market and financial services, as well as adequate and dignified pension system. [ABSTRACT FROM AUTHOR]

The Mexican automotive sector--integrated into the regional value chain of North America, led by the United States--is characterized by performing mainly manufacturing tasks, which limits its value-added contribution. However, this does not imply that the environmental impact resulting from these tasks is proportional to the value it generates. The paper aims to analyze this dual dimension of the Mexican automotive sector, by describing both its productive structure and its environmental impact related to its foreign trade flows. The results reveal uneven participation in the regional value chain depending on whether Mexican value-added exports are considered in monetary or emission terms, which exhibits a greater contribution in terms of emissions than in value compared to the United States. [ABSTRACT FROM AUTHOR]

The structure and the trend of the fiscal system reflect the orientation of the development model of Mexico in past decades and they determine its future model and its ability to meet the main social challenges (development, equity, wellbeing, environmental sustainability, etc.). The objective of this paper is to study the relative dimension, the tax structure and the trends in tax collection, as well as the nature and the objectives of the incentives and the tax benefits that have been enforced in Mexico in recent years. This exercise allows an evaluation of the 2014 tax reform to be made with the perspective of the past six years and the formulation of future challenges. A descriptive and qualitative approach was used based on data obtained from the Inter-American Center of Tax Administration (ciat), the Organisation for Economic Co-operation and Development (oecd), and the Secretaría de Hacienda y Crédito Público (shcp). The structure of tax collection is analyzed, with a focus on the main federal taxes, as well as the volume and the composition of tax expenditure, by breaking down the existing incentives and the tax benefits on each of the taxes. The main results indicate a passive evolution in the collection power that grew from 12.5% of gross domestic product (gdp) in 1990 to 15.6% in 2019, principally based on consumer taxes, wage income tax and a strong dependence on the fossil fuels sector. This shows that some of the stated objectives of the 2014 reform--significantly increasing collection capacity and reducing the jungle of incentives and tax benefits--have hardly been met. In conclusion, some of the challenges that a tax reform should face in terms of inclusion, equity and sustainability are formulated. [ABSTRACT FROM AUTHOR]

Wide concern between academics and policy makers in several countries has long existed on the question of whether individuals are saving enough for their retirement phase. Empirical evidence for developed countries, as well as the little evidence available for developing nations, shows that this is not the case. This paper provides a review of the theoretical literature on the topic, particularly on the Life- Cycle Model, as well as further approaches that contribute to explain this phenomenon. Special emphasis is given to the Mexican case, providing the small amount of evidence available about retirement savings of Mexicans and showing that, in general, it is not adequate. Finally, the paper concludes with some considerations, useful for public policy that will address this problem. [ABSTRACT FROM AUTHOR]

Background: The effects that the expansion of the Seguro Popular (sp), Mexico's universal--according to the government--health insurance program, has had on the human and material resources needed to meet the new demand remain largely unexplored. It is a key piece in the quest for universal healthcare that we analyze in this paper. Methodology: Unlike previous evaluations, we use sanitary jurisdictions as units of analysis and operationalize sp's intervention as a continuous treatment indicator (relative to the number of recipients). Results: Estimates using a variety of propensity score approaches suggest that, on the average, sp effectively has had a positive impact on Mexico's health resources. However, quantile and interaction treatment effects also suggest unexpected distributional effects on health resources. Conclusions: Overall, our results suggest that the program may be leaving behind some of the most vulnerable geographical areas. [ABSTRACT FROM AUTHOR]

New Economic Geography (NEG) focuses on the question of whether trade leads to a greater concentration of economic activity. Little empirical work has been done on assessing the regional distribution of the impact of trade. Therefore, this paper looks at the regional distribution in Mexico of the benefits from trade after NAFTA. Unlike previous papers, this study works with municipal-level data, which not only makes it possible to observe the growth patterns across space more clearly but also to identify the effect of NAFTA. The results show that after NAFTA, output per worker in regions near the Mexico-U.S. border grew faster than that in those further away. Furthermore, the trade agreement increased inequality, implying trade increased economic concentration by causing cities to grow faster than other regions. Similarly, regions with a more literate workforce were better able to benefit from NAFTA, growing faster than other areas after the trade agreement. [ABSTRACT FROM AUTHOR]

Although Mexico had a significant increase in years of schooling in the last 20 years, the quality of its education system -an important determinant of long term growth- is far from being satisfactory. Using the results from the first standardized test in upper middle school (ENLACE MS), the paper shows that a model including household, personal, institutional, and school characteristics can account for more than 40 percent of the total differences observed in math scores. From a policy perspective, the paper's results suggest that education authorities interested in fostering education quality should concentrate in improving school infrastructure, the quality of its teachers and the relationship between students and school authorities. [ABSTRACT FROM AUTHOR]

Background: From the perspective of institutional theory, this paper studies the relation between the abilities of family-member CEOS and the financial performance of listed family companies, in a setting of formal institutional weakness. Methodology: The study sample is composed of non-financial family firms listed in the Mexican Stock Exchange during the 2001-2014 period. Econometric analysis is attained through linear models for panel data, estimated by ordinary least squares (ols). To take into account endogeneity concerns, regressions are run through the generalized method of moments (gmm). Results: The results obtained indicate that better corporate financial outcomes are achieved with external CEOS than with family-member CEOS, even when their abilities, in terms of experience and academic background, are similar. The inverse relation found between family-member CEOS and financial performance was moderated when the CEOS had a high business-related academic background, thus acquiring the skills and greater perspective needed to cope with the higher transaction costs and increased business risks present in environments of formal institutional weakness as is the case in Mexico. Conclusions: In a context of formal institutional weakness, investment in businessrelated higher education --of high quality, and in one's own country-- is a good long-term strategy for family businesses that wish to promote a family-member CEO. [ABSTRACT FROM AUTHOR]

Background: The Global Value Chain (GVC) is a recurrent approach to analyse the changes in the production geography in the auto-parts industry. Attending to GVC, certain regions have the decision power to coordinate the productive and technological innovation. This spatial model is dynamic and it is thus possible to modify the initial status of a region within GVC. This paper aims to analyse the keys in the evolution of Mexico in the auto-parts sector from the GVC perspective, focusing on the development of home companies and the role of institutions. Methodology: The methodology combines a qualitative and quantitative analysis to compare key variables from domestic firms and institutions belonging to a Mexican region (el Bajío) and a Spanish region with an intermediate status in the GVC (North-west region). Results: The multinationalization degree of Mexican companies, understood as the presence of leading domestic multinationals in the industry, is lower than in the Spanish region. Furthermore, Mexican domestic companies' show activities with lower added value and complexity, and they are mostly simple suppliers of components or raw materials and therefore are not in the first levels of supply within the GVC. This reduces the technological innovation and it causes a scarce diversification of knowledge in the Mexican region, with competencies and capabilities comparatively simpler than in the Spanish one. Conclusions: The multinationalization and the technological innovation capacity of domestic companies are a key for Mexico to evolve within the automobile GVC. Regarding institutions, the improvement of some innovation infrastructures in terms of performance, and a better definition of public policies towards the multinationalization and the promotion of technological innovation in domestic companies can favour the evolution of Mexico within the GVC. [ABSTRACT FROM AUTHOR]

The main purpose of this paper is to present fuzzy sets theory as a reliable and straightforward methodology to measure poverty, which offers comparative advantages with respect to traditional methods. This paper also shows that fuzzy sets methodology is compatible with census data information to compute poverty indexes. Results of measuring poverty at state, municipal and town levels are presented for the case of Mexico and are compared with official results. Comparison reveals that fuzzy sets theory is an alternative that solve some of the methodological problems present in poverty lines and marginalization indexes, which makes it a helpful tool to evaluate and implement policies aimed at tackling poverty. [ABSTRACT FROM AUTHOR]

This paper discusses the growth slowdown of the Mexican economy during the reform and post reform periods. It addresses four possible factors behind the growth deceleration. First, the role of international trade integration, showing that the trade policy reforms of the 1980s and 1990s were in fact very successful in enhancing export growth and trade openness but not in promoting a dynamic pattern of trade specialization. Second, the productivity growth slowdown, arguing that this should be seen as a consequence rather than a cause of the growth deceleration as the evolution of productivity growth is closely associated with the expansion of tertiary underemployment. Third, the discussion of the role of human capital formation suggests that educational and health indicators have been improving during the recent period, partly as a consequence of the demographic bonus, and cannot be held responsible for the fall in output per worker that has taken place since the early 1980s. Finally, the paper focuses on what it believes is the primary determinant of the growth slowdown, the low rate of physical capital accumulation. [ABSTRACT FROM AUTHOR]

Background: In Mexico, to help control the epidemic of overweight and obesity an integral strategy that incorporate a tax on sugar sweetened beverages and a group of food with high caloric content, including snacks was implemented since January 2014. In this paper we analyze how prices of snacks behaved after the tax and we estimate the potential impact of the price increase in the consumption. Methods: For the price analysis we apply a model for panel data with three scenarios and an interrupted time-series model. For estimating the potential impact of the prices increase in the consumption we develop scenarios on elasticity and tax rate. We use public information from INEGI for both analysis. Results: From the price analysis, results indicate that the industry transferred the tax to prices of snacks completely. Likewise results show that the tax enforced from 2014 to 2016 generated a moderate reduction in consumption. Estimates of the potential impact in the consumption indicate that a higher tax rate would generate bigger decreases in consumption and that the tax would be more effective if the demand of the snacks is elastic. Conclusions: Results provide information to reconsider the tax rate and alert about the need to evaluate the strategy as a whole. [ABSTRACT FROM AUTHOR]

Background: The creation of the Transatlantic Trade and Investment Partnership (TTIP), that the United States (US) and the European Union (EU) are currently negotiating, will have a major impact on world trade, especially in third-country economies with greater dependence on any of the signatoring countries, as it is the case of Mexico. Methods: This paper analyses the effects of this trade agreement on the exports of the Mexican manufacturing sectors through the application of a model of multiple gravity equations in two possible scenarios (ambitious and limited TTIP). Results: Findings show significant drops of Mexican manufacturing exports and a weakening of its role in the global value chains, especially in those sectors where the EU has significant competitive advantages in its trade with the US. Furthermore, the estimated impacts show that the trade diversion effects would be particularly relevant in those industries with high dependence on exports to the US market, such as machinery and transport equipments. Conclusions: The update of the trade agreements between Mexico and the US and the EU could mitigate the potential negative effects of TTIP, provided that this update leads to an approximation to the standards set for European exports in this new agreement. [ABSTRACT FROM AUTHOR]

This article evaluates two recent critiques to the author's papers on the distributive effects of market power in Mexico. [ABSTRACT FROM AUTHOR]

In 2008, Mexico's Federal Competition Commission (CFC) commissioned a study of the distributive effects of market power which has influenced the national discussion on competition policy. In this paper, we attempt to replicate its results, we extend them to future years, identify and correct deficiencies in the analysis, and evaluate the conceptual and methodological framework employed. We conclude that the method used does not produce reliable results. Furthermore, using the same method, we estimate a welfare loss between 0.8 and 2.1% of total spending, depending on the income decile. While the conclusion that lower income households are more severely affected by the exercise of market power holds, we find that this effect is greater in urban areas than in rural areas for the lowest income households. [ABSTRACT FROM AUTHOR]

This paper aims to provide evidence to shed light on the role of order flow in transmitting information to price, for the Mexican peso/US dollar exchange rate in the short and long run. Specifically, we offer a statistically sound characterization of how order flow conveys non-public information to such exchange rate and through which specific channels, order flow impulses contribute to mapping the relevant information. In order to do so, we use a cointegrated SVAR model to show that including order flow in a standard monetary model specification increases the explanatory power and forecast precision, but more importantly to demonstrate that order flow is informative about fundamentals and is associated with transitory exchange rate movements generated by monetary policy news. Our tests on the underlying long run and short run mechanisms confirm that the relation between the exchange rate and order flow is consistent with the macro approach to exchange rate determination, as suggested by Bilson's version of the monetary model, and that transitory monetary shocks are, to some extent, transmitted to the nominal exchange rate through order flow in Mexico. [ABSTRACT FROM AUTHOR]

En este artículo se argumenta que la corriente dominante en economía no es un bloque monolítico sino que, más bien, se compone de un núcleo ortodoxo en el que prevalece el pensamiento neoclásico y un conjunto de enfoques de vanguardia que comparten con la ortodoxia su interés por la modelación formal (matemática, computacional o estadística) y por el análisis del comportamiento micro para describir fenómenos agregados. Al revisar las fichas bibliográficas de la base de datos de RePEc (Research Papers in Economics) se encuentra, por un lado, que las investigaciones que se realizaron a nivel mundial con enfoques de vanguardia tuvieron un gran crecimiento en el periodo 2000-2012 y, por otro, que las investigaciones económicas de índole vanguardista en México son relativamente escasas. Esta falta de pluralidad también se refleja en los programas de licenciatura y posgrado de las universidades mexicanas, en donde la estructura curricular se limita la mayoría de las veces a planteamientos ortodoxos y en unos cuantos casos a tratamientos heterodoxos (es decir, que se ubican fuera de la corriente dominante). [ABSTRACT FROM AUTHOR]

In this paper, we study the relationship between the size of sugarcane cultivation plots in Mexico and their yield. We show, theoretically and empirically, a U-shaped association between these variables. We present suggestive evidence that this relationship is driven by the more intensive use of inputs in smaller and larger plots relative to those of medium size - those of about eight hectares. These results contribute to the debate regarding the relationship between the size of agricultural production units and their productivity; in the case of Mexican farms, this literature is practically nonexistent. [ABSTRACT FROM AUTHOR]

Early 2012 the Organization for Economic Cooperation and Development (OECD) released a Review on Telecommunications Policy and Regulation in Mexico, which was heavily criticized by consultants of Mexico's incumbent telephone companies. The OCD answered the objections only formally, arguing that the study was performed according to established procedures and that it had been approved by all its member states. Last year El TRIMESTRE ECONóMICO dedicated a special issue to the unresolved controversy. Apart from publishing translations of two articles criticizing the Review, a few selected authors shed their light on the subject matter. The purpose of this paper is to show that the articles of El TRIMESTRE complicate matters unnecessarily and that the quantitative results of the Review are simply erroneous and inconsistent. To see that there is no need for sophisticated econometric exercises; just a revision of the figures, some rigor of analysis and a skeptical look at a partial-equilibrium graph are sufficient to make clear that the findings of the OECD are out of touch with reality. [ABSTRACT FROM AUTHOR]