Balance of payments and economic growth constrained. A comparation between Argentine and Mexico

Mexican and Argentine economic growth have shown common features in
the last five decades. On one hand, both countries have shown a rapid economic
growth before debt crises in the eighties; after those years, growth rate dropped
and intense crises occurred (Mexico 199-95 and Argentine 2002). On the
other hand, both economies have shown very different international patterns
of specialization but both face up similar balance of payments restrictions on
growth. The aim of this paper is to compare the economic growth dynamic in
Mexico and Argentine in the 1968-2003 period. In so doing, we use the balance
of payments constraint model, labelled Thirlwall ́s Law. We demonstrate the
existence of a long-run relationship among economic growth, exports and terms
of trade in the Mexican economy. We compare these estimations with those for
Argentine economy adressed by Fugarolas and Matesanz (2007). Our results
show that the balance of payments constrained model is useful to explain the
dynamics of economic growth and the recent crises in both countries.
Guadalupe Fugarolas Álvarez-Ude
Eduardo Candaudap
Attached file: 

Newsletter Subscription

Suscríbete a nuestra Newsletter con tu dirección de correo electrónico.

Go to top