This paper tests for a ‘fallacy of composition’ by analysing the demand for exports of the 18 developing countries that are most specialised in manufactures in the markets of the 10 largest industrial countries. Estimated export equations (both time-series and panel data) suggest that most...

This paper estimates the effects of external constraints on growth and investment in the Mexican economy, and how those effects have changed since the economic liberalization of the 1980s and the formation of NAFTA in 1994. Shocks to net financial inflows, world oil prices, the U.S. growth rate,...

Summary This article finds that shocks to net financial inflows, world oil prices, the US growth rate, and the lagged real exchange rate explain most of the fluctuations in Mexico's annual growth since 1979. The article also estimates how the effects of these external constraints have changed...

Previous studies have found that a tightening of the balance of payments (BP) constraint can explain the slowdown in Mexico’s growth after its trade liberalization in the late 1980s. This paper develops a disaggregated model of the BP constraint with two types of exports (manufactured and...

The Economics of Demand-Led Growth is a collection of specially written essays that develop and apply the theory of demand-led growth. Long-run growth is usually portrayed as a supply-determined process. The contributions to this volume, however, are rooted in the theory of demand-led growth. In...

In this chapter, we analyze the expectations and the realities about the economic impact of NAFTA on Mexico in terms of economic convergence, trade, investment, employment, wages, and income distribution. We show that NAFTA has basically failed to fulfill the promise of closing the Mexico-U.S....