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This paper presents an extended model that includes Thirlwall's simple rule. Growth in Mexico fell from an annual average of 6.76% in 1961-1981 to 2.95% in the 1982-2004 period. Net lows of capital, rents and transfers promote and stabilize the economy, but devaluation does not improve growth. Income growth rates and income elasticities between Mexico and the United States have become equal, which prevents convergence of per capita income. Mexico must design and implement an industrial policy if it wants to increase its rate of growth and face the fall of oil reserves and the changes in US immigration policies. [ABSTRACT FROM AUTHOR]

This paper has the purpose of showing that after the first years of North America Free Trade Agreement (NAFTA) operations, Mexico's northern border states have been benefited differentially by improving their economic integration to United States and Canada, conducting to a distinct ranking of productive capabilities within this region. It is shown that after this restructuring process, winners are not necessarily those entities with prior best economic performance. Particularly, considering the employment growth Baja California, appears as the great winner and Sonora as the loser. [ABSTRACT FROM AUTHOR]