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We estimate the determinants (terms of trade, tradable to non-tradable price differentials, interest rate differentials, forward exchange rate and risk premium) of the Mexican bilateral real exchange rate (q) for the short and long run by using an Autoregressive Distributed Lag model (ARDL, Pesaran and Shin et al. (2001)) for Mexico (2001.01–2022.12). The inclusion of commercial and financial variables and finding empirical evidence of cointegration only for 2009.01–2022.12 are the main contributions. Our results indicate no cointegrating relationship either for the entire sample, or for 2001.01–2008.12. This finding has to do with the increasing international financialization process, after the 2008–2009 Great Financial Crisis. Using a double log model we find that: a) there is a strong short-run autoregressive effect of q of up to 4 lags (0.75), b) that the Balassa-Samuelson Effect is the largest in the model (-0.27 and -1.11 for short and long terms), c) the next most important factor is the terms of trade (-0.126 and -0.51, respectively), d) there are considerable, although lesser, effects of financial variables: forward exchange rate (0.0155 and 0.063, respectively) and risk-premium (0.009 and 0.036, respectively), e) there is a clear long-term trend of real depreciation expressed by the trend of 0.0020, which suggests that the PPP hypothesis applies. [ABSTRACT FROM AUTHOR]

By contrasting the Great Depression and the Coronacrisis, we demonstrate that narrative economics (Shiller, 2017) is key in the analysis of economic fluctuations. We note the importance of the populist narrative to understand the economic and health outcomes of the Coronacrisis in Mexico and highlight the role of the predominance of different economic paradigms in economic policy decision-making. We suggest that, just as in 1929, by following orthodox primary fiscal balance sheet policies at the cost of contracting government investment, the Mexican economy will undergo a long and painful recovery process compared to its global peers. [ABSTRACT FROM AUTHOR]

In recent years, the labor market in Mexico has become increasingly precarious, as the proportion of the employed population that receives low wages has risen and the critical conditions of occupation have grown exponentially. To enrich the concept of labor precariousness, we aggregated three additional variables. Through a logit model -with data from the Social Mobility Survey in Mexico 2017-we proved that a set of variables that are external to individuals have statistically significant effects on the employment trajectory and social mobility of the employed population. These results empirically validate The Great Gatsby Curve for Mexico. [ABSTRACT FROM AUTHOR]

We examine the efficiency of the cash transfers on multidimensional extreme poverty in the states of Mexico for 2008-2018. We estimate econometric models with panel data with OLS and 2SLS and with cross-section data with GMM that shield against endogeneity of the determinants of poverty. We prove that there are perverse incentives that have caused that transfers perpetuate poverty in the less developed states. Homicides and informal employment have perpetuated it. Agricultural labor productivity, economic growth, productive export orientation, and a better Rule of Law reduce it. [ABSTRACT FROM AUTHOR]

A luz de la ley de Okun (1983), en su versión de tasas de crecimiento, se evaluó la sensibilidad del desempleo a la actividad económica estatal en México (desde inicios de 2004 hasta el primer semestre de 2018). Para capturar la heterogeneidad de las 32 entidades federativas se contrastaron los resultados de regresiones individuales con la estimación de datos de panel de efectos fijos. El coeficiente de Okun es significativo y con el signo correcto en 22 entidades federativas, con una variación entre -7,21 y -1,25. Las diez entidades restantes (con signo incorrecto y coeficiente no significativo) se caracterizan por deficientes desempeños económicos, sociales e institucionales. Se observa que la gran recesión generó cambios estructurales en 15 de las 22 entidades federativas donde sí se cumple la ley de Okun en todo el período; además, en estas 22 entidades el índice del Estado de derecho y la tasa de condiciones críticas de ocupación determinan la sensibilidad del crecimiento del desempleo al crecimiento del producto. [ABSTRACT FROM AUTHOR]

This paper uses Kaldor's first law to provide an explanation for Mexico's low economic growth over the last four decades. The starting point for analysis is the hypothesis that the lack of dynamism in total production (non-manufacturing) is due to slow momentum in manufacturing and, in particular, to the fact that the Kaldor coefficient has decreased with trade liberalization. Estimates were made (1980.1- 2017.2) using the generalized method of moments (GMM) and rolling regression (recursive estimations). These estimates have been useful in solving the problem of serial correlation and have contributed towards a better statistical evaluation of the evolution of the Kaldor coefficient. [ABSTRACT FROM AUTHOR]

Recent literature has empirically demonstrated that the real exchange rate is essential to explaining the economic evolution of developing countries. It has been empirically proven that the anti-inflation exchange rate policy implemented systematically in Mexico has constituted a major restriction on the country's economic growth, a restriction that has persisted throughout this entire time period, even through different monetary and exchange rate regimes. This paper estimates an svar (1950-2014) that shows how the continuous appreciation of the real exchange rate has curbed Mexico's economic growth capacity and had an impact on other macroeconomic balances. This alone could be considered a highly potent structural macroeconomic reform. [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]