Search

This research evaluates the long-term determinants of Mexican manufacturing competitiveness in the U.S. market. To perform this task, an International Competitiveness (IC) index is constructed and then a model is specified and estimated by using three different econometric methods. The empirical evidence across econometric techniques is consistent in indicating that IC is responsive to the peso-dollar real exchange rate, the yuan-dollar real exchange rate, labor productivity, wages, and the cost of credit. An important contribution of this paper is to show that manufacturing IC is influenced by the yuan-dollar real exchange rate and the real cost of credit. [ABSTRACT FROM AUTHOR]

This paper studies the long-run and short-run dynamics between emigrants' nominal inbound remittances in U.S. dollar term to Mexico and the Peso-Dollar nominal exchange rates. Relatively high frequency monthly data from January 1987 through December 2008 are employed. Given the comparatively short sample period, the monthly data partially compensate for implementation of standard cointegration methodology. Empirically, both variables are found nonstationary in levels with I(1) behavior in terms of DF-GLS, Ng-Perron, and KPSS tests. The changes in exchange rate exert more pronounced influences on the changes of remittances in the long run as compared to the converse. Significant short-run interactive net positive feedback effects between the variables are also evidenced. On a net basis, Mexico should pursue an exchange rate policy that would promote remittance inflows from the USA for potential net economic gains without much apprehension of the so called Dutch Disease. [ABSTRACT FROM AUTHOR]

This paper presents an econometric analysis of the demand for the monetary aggregate M1 for Mexico. Using cointegration techniques, we identify both a stable long-run relationship between M1 and its determinants, and a statistically sound single-equation error-correction model. Results are used to carry out the following simple applications: i) empirical determination of the value and stability of dual inflationary equilibria, given the observed seigniorage levels; ii) calculation of the seigniorage maximizing inflation rate, and iii) analysis of the potential relationship between a measure of excess money and inflation. Results indicate that the low inflation equilibrium is stable, and that the excess money indicator shows, in retrospective, some capacity in predicting inflationary pressures. [ABSTRACT FROM AUTHOR]

An inelastic tax system increases the uncertainty associated with tax revenue collection. This results in continuous short-term adjustments to maintain the stability of tax collection. In this paper, we estimate the revenue elasticity of the principal taxes in Mexico, finding a much greater elasticity than that found in previous studies. A cointegration model between the revenue and taxes is used which satisfies strong exogeneity, providing a basis for congruent and reliable projections. Using this model, the tax revenue projected for 2011 is much lower than the estimates prepared by Mexico's federal government. [ABSTRACT FROM AUTHOR]