Why Have Economic Reforms in Mexico Not Generated Growth?
Kehoe, Timothy J., and
Kim J. Ruhl. 2010. "Why Have Economic Reforms in Mexico Not Generated Growth?."
Journal of Economic Literature,
Following its opening to trade and foreign investment in the mid-1980s, Mexico's economic growth has been modest at best, particularly in comparison with that of China. Comparing these countries and reviewing the literature, we conclude that the relation between openness and growth is not a simple one. Using standard trade theory, we find that Mexico has gained from trade, and by some measures, more so than China. We sketch out a theory in which developing countries can grow faster than the United States by reforming. As a country becomes richer, this sort of catch-up becomes more
difficult. Absent continuing reforms, Chinese growth is likely to slow down sharply, perhaps leaving China at a level less than Mexico's real GDP per working-age person. (JEL E23, E65, F14, O10, O20, O47)
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Kehoe, Timothy J. (U MN and Federal Reserve Bank of Minneapolis)
Ruhl, Kim J. (NYU)
E23: Macroeconomics: Production
E65: Studies of Particular Policy Episodes
F14: Country and Industry Studies of Trade
O10: Economic Development: General
O20: Development Planning and Policy: General
O47: Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence