Article: Balance-of-payments constrained economic growth: The case of Mexico

Balance-of-Payments Constrained Economic Growth: The Case of Mexico*

1. Background

From 1940 to 1981 Mexico experienced spectacular economic growth, with its gross domestic product (GDP) expanding in real terms at a speed that outpaced that of the United States of America (US), its powerful neighbour. In those four decades, in spite of its rapid demographic expansion, Mexico cut down nearly ten percentage points in the gap of its GDP per capita vis--vis the US. From being equivalent to 22% of the US average in 1939, Mexico's GDP per capita climbed to represent 30% of the US figure in 1981, measured in constant dollars (Maddison 1995).

However, the evolution of the Mexican economy since ...

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