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The article titled "Economic History of the Mexican Peso: From the Global Market to the Political Management of Currency" is a book that addresses the evolution of money in Mexico from colonial times to the late 20th century. The Bank of Mexico has aimed to provide the country with national currency and promote the development of payment systems. The book highlights the importance of security and trust in money for it to fulfill its functions properly. It also mentions moments of transition in the political management of currency, such as the financial bankruptcy of the Viceroyalty and the reintegration of the Mexican peso into the global economy after Independence. During the 19th century, different forms of political currency management emerged, including the introduction of copper coins and the use of paper money. The text provides a summary of Mexico's monetary history from the late 19th century to the present, highlighting the adoption of a floating exchange rate regime and the relevance of the Mexican peso as a global currency. The importance of understanding monetary history to effectively face future challenges is emphasized. [Extracted from the article]

This paper analyzes empirically the existence of the credit channel of monetary policy in Mexico, that is, the relationship between changes in the target interest rate and variations in credit granted by commercial banks. The study combines aggregate information with data from the individual balance sheets of commercial banks and conducts a panel data regression analysis. The analysis is performed for total credit and its components (business, consumer, and mortgage). Additionally, by using banks' accounting information, it explores whether the transmission mechanism occurs on the supply side. It is found that there is a negative and economically significant relationship between interest rate and credit, and such a relationship is established for different types of credit. Furthermore, evidence suggests that the transmission mechanism operates on the supply side, as banks with more robust balance sheets exhibit greater resilience to changes in the interest rate. [ABSTRACT FROM AUTHOR]

This paper analyzes the characteristics of Mexico's productive and commercial integration from 1995 to 2018. It offers a framework to understand how the sectors of the Mexican economy are integrated into global value chains (gvc). The methodology developed by Wang, Wei, Yu, and Zhu (2017a and 2017b) is applied to the interregional input-output matrices of the Organisation for Economic Co-operation and Development (oecd). With this, two questions are answered: 1) What percentage of production factors used in Mexican sectors have been involved in activities of segmented production or gvc between countries? And 2) what percentage of final products produced by sectors in Mexico come from gvc activities? The results indicate that the sectors of the Mexican economy have higher participation indexes in backward linkages, which shows a higher share of imported intermediate inputs, compared to their respective participation indexes in forward linkages. The latter represents inputs from the country in exports and production of goods from third countries. Additionally, the results indicate that any policy design aimed at promoting specific activities should take into account the increasing integration of countries and their sectors gvc on a global scale, regardless of their level of development. This fact may limit the options for further integrating activities related to gvc with domestic activities. [ABSTRACT FROM AUTHOR]

In this paper we analyze the feasibility of exporting spiral notebooks from Argentina to Mexico. We consider this possibility for a leader Argentinean enterprise both, the Argentinean and Mexican markets are studied, and also the strategic positioning of the several enterprises operating in the Mexican market. We also include a sensitive analysis on the exchange rate, giving as a result several alternative scenarios for possible competition among the enterprises. We conclude that it is very convenient for this type of enterprise. [ABSTRACT FROM AUTHOR]

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]

The objective of this paper is to quantify the land use from the primary activities in terms of consumption in Mexico. To do this, we assign data on the land use for agriculture, livestock, productive forestry, and aquaculture to the primary economic activities represented in the 2018 input-output table. Also, the input-output model of land use is complemented with statistical information from the import matrix and the social accounting matrix of 2018. The results indicate that the land footprint amounts to 61 745 416 hectares and 0.49 hectares per capita. This means that 73% of the land footprint is represented by land areas within our country and 27% by areas in other countries. The land demand derived from the consumption of the population in Mexico is greater than the land areas used in the production of primary activities. This study has two limitations: one referred to the assumptions of the input-output model and another, to the concept of land use. The originality and value of the article consist in analyzing the demand for land for food production in Mexico, which represents the greatest threat to the conservation of terrestrial ecosystems and the ecological services that emanate from it. [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]

The purpose of this paper is to evaluate comparatively the quality of exports from Mexico and South Korea. The indicators used are the following: domestic value-added (va) embodied in exports; decomposition of domestic value-added between direct, generated indirectly exporting activities, and indirect, created in those that produce inputs that are embodied in exports; use of domestic va embodied in exports by the rest of the world, divided between the parts to produce exports and for uses other than exports; domestic employment contained in exports, both for directly and indirectly exporting activities; labor productivity in the export sector in direct and indirect exporting activities; and wages per worker in the export sector, also classified between those that export directly and those that supply inputs to exporting activities. All indicators are broken down by technological level of exports according to the Organisation for Economic Co-operation and Development's (oecd) classification (2011). The data analysis allows us to conclude that, despite the high weight of manufacturing exports, particularly those of high and medium-high technology, in total exports of Korea and Mexico, the quality of these exports of the former is much higher than those of the latter: domestic va contained in their exports (as a percentage of exports) is notably higher; they are more integrated into the global value networks of parts and components; domestic linkages, measured by the indirect jobs they generate, are more intense; and labor productivity and, consequently, wages per employee in export activity are three times higher than in Mexico. [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]

This paper analyzes debt securitization in underdeveloped countries, using the case of Argentina, Mexico, and Brazil. We argue that the three countries have had a significant increase in the issuance of debt securities. However, the nature of the securities issued is different in each nation. In the case of Argentina, the increase in international debt securities in circulation has to do with the issuance of government securities. In Mexico, the increase is more related to the new financing needs of Mexican non-financial corporations. While in Brazil, the increase in the issuance of debt securities is due to a combination of both factors. [ABSTRACT FROM AUTHOR]

Given the uncertainty in this regard, this paper analyzes the most appropriate monetary policy position for Mexico, which aims to maintain the inflation objective without negatively affecting product growth. The value of the neutral interest rate in Mexico for the next five years is estimated based on Taylor's rule and a co-integrated vector autoregression (VAR) model (CVAR). The results suggest that the monetary policy rate is above the neutral interest rate, which, combined with the potential international rate cut, could grant the central bank for almost the entire six-year period a degree of freedom to maintain its rate below the current level; in the short term the current monetary policy rate could be cut by at least 25 points without risking convergence to the inflation target. [ABSTRACT FROM AUTHOR]

This paper provides a multidimensional reflection on the covid-19 pandemic. It states that the dominant analytical approach to the pandemic is medical and epidemiological, which leads to an underestimation of its social, economic and political causes and impacts. It also calls attention to the fact that scientific knowledge on covid-19 is still scarce and contradictory. The essay starts with a review and analysis of the magnitude of the problem compared to other causes of death in Mexico, and a review of how different social and economic conditions seem crucial for the frequency and severity of the disease. It examines the behavior of the medical industrial complex relative to the production of vaccines, drugs and other medical devices, and detects divergent conducts: one highly speculative, including financial speculation, and another that, for the time being, has promised not to take a profit. Finally, there are some considerations concerning how the virus is changing political processes. [ABSTRACT FROM AUTHOR]

Since its beginning the 1980s, the globalized model of economic development in Mexico has generated paradoxical results. On the positive side, Mexico attained a privileged position among the mayor economies of the world by becoming the 13th largest exporter and the 12th main importer, while simultaneously turning into a high-ranking recipient of foreign direct investment. These positive results deeply diverge with the mediocre performance in economic growth and the high levels of unemployment, informality and poverty. In this paper we argue that these paradoxical results are the consequence of structural disequilibrium caused by the reorientation of production towards export-based global value chains, which did not contribute to the development of an integrated industrial sector with forward and backward linkages between foreign and local firms. The flows of trade and investment that were stimulated by the North American Free Trade Agreement (nafta) did not promote economic growth in Mexico because of structural weaknesses that derived from an exporting sector where foreign firms limited the value-added produced by local firms, and created an inelastic supply of imported inputs. Hence, the export-led model became a development strategy that weakened the capacity for the consolidation of a strong and dynamic internal market. [ABSTRACT FROM AUTHOR]

Following the indicators used by the International Labor Organization (ILO) in its studies and the publication Reversing Pension Privatizations: Rebuilding Public Pension Systems in Eastern Europe and Latin America (2018a), this analysis evaluates pension systems in Mexico in order to contextualize the debate regarding the following questions: Are privatizations a failure? Do we have to reverse privatizations or just reform the current system? Would it be enough? Or, do we have to build an integral system of public pensions? This paper presents a diagnosis of the current situation of the pension system in Mexico, in order to contextualize possible responses and the main challenges and circumstances for Mexican society. The lack and insufficiency of pensions for an aging population where most people work in the informal sector with low-income jobs poses a challenge to the pension system. [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]

This paper develops a typology of corporate architecture and corporate governance in order to analyze the Mexican Business Groups. The typology helps under- stand: 1) the evolution of Mexican business networks towards a centralized coordination of the firms, and 2) how changes in some features of corporate governance have tended to preserve a state of few counterweights to the decisions of majority shareholders. Moreover, this paper presents a survey that provides a set of possible explanations for the formation and operation of Business Groups. This review helps assess the analytical advantages of a socioeconomic approach that conceives these business networks as a consequence of sociocultural, institutional, and economic factors, which provides a theoretical basis for understanding the historical persistence of this business system in Mexico and other countries. [ABSTRACT FROM AUTHOR]

Adopting a legal definition of informality, this paper studies the causes of informality in general and with a particular application to Mexico. It starts with a discussion on the definition and measures of informality. It then argues and provides evidence that informality is not only a reflection of underdevelopment but may also be the source of further economic retardation. Next, the paper analyzes informality's main determinants, arguing that informality is not single-caused but results from the combination of poor public services, a burdensome regulatory regime, and weak monitoring and enforcement capacity by the state. This combination is especially explosive when the country suffers from low educational achievement and features demographic pressures and primary production structures. The paper then evaluates the empirical relevance of each determinant of informality to the specific case of Mexico. [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]

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]

The present paper focuses on the potential bias in growth estimation generated by the problem of missing data (or data truncation) due to changes in census survey policy. The analysis will help to ascertain which sub-sectors in manufacturing were experiencing growth to show evidence supporting the hypothesis of a positive growth rate in manufacturing as a whole during the period 1929-1934. We particularly analyze the performance of the Mexican manufacturing industry at sub-sector level of disaggregation and during the period 1929-1934 considering that census policy was not homogeneous for the two censuses of interest (and for subsequent ones). When any data set is truncated, this can generate bias in the estimation process. However, the bias in estimates based on these data sets will depend on how important the proportion of missing data is. Hence, one of the main tasks on this paper is to examine how important the missing data problem is for each sector of Mexican manufacturing in order to shed light on the reliability of Value Added growth rates estimates which are calculated in this paper. [ABSTRACT FROM AUTHOR]

This paper analyzes the effect of minimum wages on the income of workers in Mexico. Using panel data from the National Urban Employment Survey (ENEU) and from the administrative records of the Mexican Social Security Institute (IMSS), this paper shows that changes in the real minimum wage induce changes in the same direction on wages in the Mexican labor market. This effect is weaker (although positive) the higher the income of the worker. It is also shown that the effect was stronger in the period comprising 1985-1993 than in the period comprising 1994-2001, suggesting that this effect is losing strength. [ABSTRACT FROM AUTHOR]

This paper introduces an indicator of consumers' inflation expectations based on data from the National Consumer Confidence Survey of Mexico, and tests its predictive power over CPI inflation and other measures of inflation that correspond to smaller baskets of consumer goods, for periods that range from 1 to 12 months. Our findings show that between January 2003 and September 2010, the predictive capability of the indicator over the different measures of inflation used was weak. Due to a modification in the survey questionnaire in October 2010, as of that date we observe a significant change in the responses and, thus, in the behavior of the indicator of consumers' inflation expectations. For this reason, from October 2010 on the main use of this indicator is to be a reference of consumers' confidence in price stability. [ABSTRACT FROM AUTHOR]

This paper aims at modeling Afore's strategies which are addressed to retain the largest number of pensioners with different income levels in a cost competition setting. In doing so, we simulate a non-cooperative static two stages game to model competition between M⩾ leaders and N followers by using a generalized Nash-Cournot-Stackelberg equilibrium (GNCSE). The main findings state that: 1) competition among Afore is not only defined by an GNCSE (which performs well at explaining Afores performance for intermediate income levels); 2) when dealing with extreme income levels, it is advisable to analyze agents as price-fixing competitors -in low income ranks- or as non-price-quantity competitors -in high income ranks- instead of as quantity Stackelberg oligopolists; and 3) there is no a direct relationship between the number agents and pensioner's welfare in Mexico's Afore market. [ABSTRACT FROM AUTHOR]

This paper presents the theoretical and operational criteria followed by El Consejo Nacional de Evaluación de la Política de Desarrollo Social (The National Council for Evaluation of the Social Development Policy, Coneval) to define the methodology for measuring multidimensional poverty. The multidimensional methodology was launched in 2009 and establishes the way in which poverty is officially identified and measured in Mexico. The methodology is illustrated with data for 2010 and 2012. This form of measurement has three characteristics that make it different from other methods. First, this approach uses a multidimensional method based on universal social rights. Second, unlike other theoretical-methodological paradigms for multidimensional poverty measurement that combine all dimensions into a single index, the identification of people in poverty, under this perspective, uses a bivariate Euclidian space measure. Income is evaluated on the first space, while a number of social deprivations are quantified on the second space. Third, the methodology classifies the population into different groups according to their poverty or vulnerable status, which helps to recommend differentiated public policy strategies and actions for each economic and social dimension. This allows more efficiency not only in targeting the poor but also in distributing social budgets. A fourth element, shared with other approaches, refers to the possibility of disaggregating the poverty measure for different groups of populations, such as, age, sex, ethnicity and territorial level. [ABSTRACT FROM AUTHOR]

This paper presents a small open economy model to study the role of real interest rate shocks in Mexico. The interest rate is divided in two terms: an international rate and a country risk premia. Simulations show that the model with endogenous risk premia is able to explain several stylized facts at business cycle frequencies. Counterfactual analysis suggests that output volatility could be lowered by approximately 30 percent if interest rate shocks are eliminated, especially due to its country risk premia component. In the absence of such shocks, cyclical output and consumption would have fallen by 2 and 4.5 percent during the 1994-1995 recession, in sharp contrast with the falls of 12 and 16 percent observed in the data. [ABSTRACT FROM AUTHOR]

Social capital can be defined as the capacity of individuals or groups to obtain benefits by participating in social networks (Robinson, Siles and Schmid and, Flores and Rello in Atria and Siles eds. 2003). In this paper, we use data from the second round of the Panel of Low Income Households in the Delegación Álvaro Obregón, México, D.F. (PAO) to fit regression models with instrumental variables in order to identify significant proxy variables related to the social capital in social networks to explain the percentage of income that households in PAO spend in food. Also, we present the results of a factor analysis to identify the variables in PAO that are related with the dimensions of trust, social networks and accepted norms that are main elements of the definition of social capital. [ABSTRACT FROM AUTHOR]

This paper analyzes the pass-through of exchange rate to different price indexes in Mexico. The analysis is based on a vector autoregressive model (VAR) using monthly data from January 1997 to December 2010. The pass-through effects are calculated by means of accumulated impulse response functions to a recursively identified exchange rate shock. The results show that the exchange rate pass-through to import prices is complete, but it declines along the distribution chain in such a way that the impact on consumer prices is below 20 percent. Moreover, we find that the exchange rate pass-through seems to have decreased substantially from 2001 onwards, which coincides with the adoption of an inflation targeting regime by Banco de México. [ABSTRACT FROM AUTHOR]

This paper shows that the evolution of the level of Mexico real and real per capita output between 1895 and 2008 can be adequately described through a trend stationary model, affected by 4 structural breaks, which ocurred at dates that seem to coincide with domestic institutional arrangements, wars, and financial and economic crises. These changes are modeled through logistic smooth transition functions, in which transition periods are endogenously estimated. In terms of growth rates, our results indicate that for Mexico real and real per capita GDP, there are four stationary growth paths, separated by three transition periods. For instance, for real GDP we identify the following stationary growth paths: 1895-1924, 1935- 1952, 1956-1978, and 1989-2008, separated by three transition periods: 1925-1934, 1953-1955, and 1979-1988. [ABSTRACT FROM AUTHOR]

This paper discusses, estimates and compares microeconometric strategic interaction models applied to the labor supply of households in Mexico. Because the possibility of decentralized decision-making within the household provides a motivation for a game theoretic framework, the model estimates are based on the assumption that the observed variables represent the outcome of a static discrete game. The models are estimated using data from the Mexican Family Life Survey 2002 (MxFLS). The maximum likelihood estimation, based on the non-cooperative Nash and Stackelberg equilibrium concepts, proved feasible and gave plausible results. The main results suggest the interdependence of individual choices within the household. [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]

Overweight and obesity are increasing throughout the world, spurring a research agenda focused on understanding its causes, consequences, and the most appropriate public policies for addressing these problems. Unfortunately, very little remains known about the relationship between overweight/obesity and intellectual and academic outcomes. This is very problematic, as public policies cannot be successfully tailored to specific situations in the absence of adequate data. This paper helps narrow this research gap by analyzing the relationships between weight and school dropout rates, held back a year and increase in falling behind in school for children aged 12 to 14 and adolescents aged 15 to 18. As such, it is the first study addressing this topic in Mexico. The findings suggest that there is no clear relationship between overweight/obesity and intellectual/academic outcomes, as overweight/obesity has no effects on some variables and negative effects on other variables. [ABSTRACT FROM AUTHOR]

This paper develops, under the framework of a small, open, and monetary economy, a stochastic model of inflation stabilization taking as a nominal anchor the exchange rate when credibility is imperfect. The agents have expectations driven by two processes: a diffusion-jump process for the devaluation rate where the size of a possible devaluation has an extreme value distribution, and a mean-reverting stochastic volatility process (a continuous version of the GARCH (1,1) model). This appropriately models that inflation is substantially more persistent than the devaluation rate; as showed the stylized facts about extreme devaluations registered in Mexico in 1994 and in Argentina in 2001. It is assumed that there is no a derivatives market to hedge against future devaluations, that is, the financial markets are incomplete. Under this framework, interior and corner solutions are examined when a stabilization plan with imperfect credibility is implemented. It is also studied an experiment in which the mean expected inflation takes a greater value from some time in the future and stays there forever, taking into account the probability that this monetary policy occurs. The case of a stochastic horizon of stabilization with the exponential distribution is studied. Moreover, the real option to postpone consumption is valued when a stabilization plan is to be abandoned. Also, exogenous shocks on consumption and economic welfare are assessed. Finally, the proposed model is used to carry out simulations that reproduce the booms of private consumption before the anti-inflationary plans were abandoned in Mexico in 1990-1994 and in Argentine in 2001-2003, when extreme devaluations took place. [ABSTRACT FROM AUTHOR]

The vulnerability and financial pressure of financial systems is a critical subject in light of the economic crisis we are currently facing. This pa per defines financial pressure of local governments as the extreme situation characterized by financial imbalances, increasing current expenditure, lack of investment, excessive public debt and debt service. Using multivariate methods this paper develops six indexes that jointly measure the pressure on local public finances in Mexico for the period 2001-2007. The se indexes-which by construction are not correlated with each other-capture more than 80% of the variation of public finance variables and show the ranking of each state in relation to other states in Mexico. Among the results we find a trade-off between public investment and balance surpluses and between savings and current expenditure. The hence-obtained set of indexes can be used by local officials to assess the relative condition of his state public finances in relation to others and by supervisors or regulatory bodies to asses the financial pressure experienced by state governments in Mexico. [ABSTRACT FROM AUTHOR]

Many analysts argue that the substantial growth in agri-food trade between Mexico and the United States can be attributed to changes in exchange rate, exchange rate volatility and NAFTA. This paper quantifies the effects of the changes in Mexico-United States real exchange rate, its volatility and NAFTA on Mexico-United States flows of milk powder and contributes, with empirical evidence, to the debate on the effects of real exchange rate changes and its volatility on agri-food trade flows. Maximum Likelihood Cointegration Analysis and a Vector Error Correction (VEC) approach are used in estimating an import demand function for milk powder in Mexico. To guide the empirical analysis, an expected utility maximization model is developed in this study and a set of reduced form equations are estimated. The results show that while changes in real exchange rate have a positive effect on milk powder imports in Mexico from the United States, volatility of the real exchange rate has a negative effect on imports, both in the short-run and in the long-run. The NAFTA has no significant effect on milk powder imports in Mexico from the United States [ABSTRACT FROM AUTHOR]

This paper considers financial, operational, solvency, and performance ratios in order to detect when there were balance sheets' variations related to the 1994 Mexican currency crisis. Quarterly data for 88 non-financial Mexican companies that survived the crisis are used, and tests for structural change are performed. Results show that generally firms' balance sheets deteriorated between the fourth quarters of 1993 and 1995. Although in most cases firms' balance sheets improved after the crisis, the recovery was partial and gradual, and overall this episode was prejudicial even for surviving companies. [ABSTRACT FROM AUTHOR]

This paper tests the momentum effect in the Mexican Stock Exchange. We document a strong momentum effect for this stock market during the period 1993-2006. In addition, we also find that neither risk factors nor transaction costs can explain the returns of the momentum strategies in this market. Finally, our results reveal that momentum returns are linked to some variables that proxy slow information diffusion or overconfidence. These results support some behavioural finance models. [ABSTRACT FROM AUTHOR]

The main objective of this paper is to provide empirical evidence regarding per capita income convergence of the states of the Mexican Republic towards the income of Distrito Federal, which is assumed to be the leading economy (Barro and Sala-i-Martin, 1991, 1992). We test such hypothesis by using two different panel unit root tests (Im, Pesaran and Shin, 1997; and Levin-Lin, 1993) and eight panel cointegration tests (Pedroni, 2001; Larsson, 2001). These econometric tools let us overcome the "small sample distortions" often faced by studies based on time series techniques. Our unit root tests do not show evidence of absolute convergence towards the leading economy from 1970 to 2004 and for two shorter samples. However, cointegration tests show evidence in favor of conditional convergence for the same period. Long run estimates of the speed of convergence (Mark and Sul, 2003) show that rich regions converge faster than poor ones. [ABSTRACT FROM AUTHOR]

This paper advocates that although an absolute notion of poverty should remain an essential ingredient in the evaluation of the standard of living in developing and transition economies, it is time that relative poverty begins to be systematically estimated for those same economies. This prescription is applied to Mexico for the 1992-2004 period, where the Fox administration had officially determined for the first time an absolute poverty line for 2000. As in the Second European Poverty Programme at the end of the 1980s, the relative poverty line is fixed at 50% of mean equivalent expenditures. Absolute and relative poverty behave in opposite ways during the 1992-2000 business cycle, but both decline significantly during the 2000-2004 stagnation period. Relative poverty is above absolute poverty from 1992 to 1994, below it during 1996-1998, and above it again in 2000-2004. In any case, relative poverty in Mexico is well above relative poverty in developed countries. [ABSTRACT FROM AUTHOR]

This paper applies econometric estimation methods to improve the level of precision and detail in the measurement of welfare in Mexico, and specifically to estimate household incomes. As is the case in other countries, Mexico has had, on the one hand, household surveys that provide high precision income measures but with very limited possibilities of geographic desegregation, and on the other, income indicators from Censuses that allow for detailed geographic desegregation but with very low precision levels. We use our estimation method to present the first series of household incomes at the state and municipality levels, as well as the first series of Human Development Indexes at the municipality level. [ABSTRACT FROM AUTHOR]

This paper shows that an economic policy change in 1982 brought about a conspicuous alteration in the relationship between money, prices and the exchange rate in Mexico. Before that year, the long-term demand for currency fit the velocity equation, and inflation was driven mainly by the money gap. After a striking changeover, from 1983 until 2000, the demand for money took a very different form, and inflation was determined by the markup without an explicit currency effect. However, the long-term relationship that links the levels of output, the exchange rate and foreign prices with that of nominal money holds for the whole sample. [ABSTRACT FROM AUTHOR]

By using a Cournot competition model, this paper aims at determining prices, quantities and market power of the largest intermediaries in Mexico's masterpieces paintings market. The main hypothesis is that those variables critically depend on the intermediaries' strategies of product differentiation, costs and conjectural variations. Results from simulation show that the model performs very well when explaining the behavior of intermediaries, especially when a parameter of product differentiation is introduced. In particular the model identifies two market niches; the one which is controlled by auction houses (the market for unique or highly differentiated pieces) and the other one which is monopolized by art galleries and art dealers (the market for common or lowly differentiated pieces). This distinction grounds the whole body of this research. [ABSTRACT FROM AUTHOR]

This paper identifies the origins and types of price rigidities that are present in Mexican manufacturing industries. The results were obtained through a survey carried out during the second semester of 2005 with 398 participating firms. The main findings may be summarized as follows: First, on average, firms maintain their prices unchanged for a period close to six months. Second, the majority of firms review their price schedules on a predetermined period of time; however, when significant shocks occur, more than half switch to a pricing strategy contingent on the evolution of the variables that affect their balance sheet. Third, price stickiness is mainly associated to production costs and to the existence of explicit and implicit contracts. Finally, prices react to the type and direction of the shocks that impact each firm. [ABSTRACT FROM AUTHOR]

After some decades of being almost forgotten, since the late eighties, the issue of economic growth has resurged again in the theoretical and empiric investigation worldwide. Nevertheless, in countries like Mexico very little applied research has been carried out; due to the fact, perhaps, that there are no existing official series of capital stock. This paper estimates the Mexican capital stock for 1980.I-2004.IV through the modified perpetual-inventory method suggested by Almon (1999). The outcome is statistic and economically consistent. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to determine whether elections in Mexico affect the growth of GNP, unemployment, inflation and public expenditure. According to the results of an econometric exercise elections have no effect on all these variables except for public expenditure. It turns out that public expenditure increases just before the presidential elections having no effect on the economic cycle. [ABSTRACT FROM AUTHOR]

This paper studies Mexican poverty levels by state during the 1992-2002 period, in order to evaluate the effect that the business cycle and governmental policies have had on poverty levels. We find that behind the business cycle and the urban poverty are inversely related and that institutional transfers reduce poverty both in urban and rural areas. [ABSTRACT FROM AUTHOR]

Over the last two decades Mexico has modified her intergovernmental fiscal structure from a very centralized system to a distorted scenario where state governments have gained substantial expenditure functions and most of the taxation responsibilities remained in the federal government. It is argued that, to move towards a more fiscal responsible scenario some decentralization on the taxation side is needed. In this con text, by constructing a representative tax system (RTS), this paper evaluates tax effort and tax potential in Mexico. The results are a useful in put for policy decision, not only in the event of future tax decentralization attempts but also in designing a new transfer scheme. The results are also the first RTS constructed for the Mexican case, which shows that regional data in Mexico is gradually improving. Also, while the results shed some light as to which taxes could potentially be decentralized, the article warns about the fact that regional disparities in the country may well be a limitation on the extent to which taxes can be decentralized. [ABSTRACT FROM AUTHOR]