MACROECONOMIC LINKAGES IN MEXICO

Abstract

ABSTRACT The authors study the effects of selected macro variables on output in Mexico, following a Kaleckian framework, and using a probabilistic approach to econometrics. They find a strong positive effect of US GDP, of protection of the domestic market and of government expenditure, on Mexico's GDP, and a negative influence of higher exchange rate and credit rationing. Their results support the overall outlook proposed by the post Keynesian and the Latin American Structuralist schools of economic thought, and reject the Washington Consensus type of policies Mexico has been following during the last decades.