This paper explores the extent to which the Mexican government's inability to roll over its debt during December 1994 and January 1995 can be modeled as a self-fulfilling debt crisis. In the model there is a crucial interval of debt for which the government, although it finds it optimal to repay...

In this paper we develop a model in which a country faces a balance of payments crisis if constraints on its international borrowing bind. We use the model to describe the dynamics of the trade balance, capital account, and balance of payments of a country that borrows to finance consumption...

Using a calibrated growth model, the dynamic effects of NAFTA on Mexican development are studied. Two scenarios are analyzed. In the first, NAFTA is assumed to stimulate inflows of physical capital into Mexico. These inflows reduce the interest rate and raise the wage rates for both skilled and...

Chile and Mexico exoperienced severe economic crises in the early 1980s. This paper analyzes four possible explanations for why Chile recovered much faster than did Mexico. Comparing data from the two countries allows us to rule out a monetarist explanation, an explanation on falls in real wages...

Detailed macroeconomic data to accompany the article in the Review of Economic Dynamics