The credibility earned by prudent policymaking over the past decade should help Mexico weather the current financial storm without devastating effects on real economic activity.

Financial shocks increase the need to shift workers among employers, industries and occupations. These disruptions, in turn, can have adverse impacts on productivity.

Mexico is growing increasingly concerned about its ability to compete with China in North America.

Initial optimism has been replaced by increasingly dire predictions for Mexico's near-term economic outlook in response to the global economic slump. World trade flows have dried up, which is particularly damaging for nations like Mexico whose economic activity depends critically on exports. At...