From the Debt Crisis toward Economic Stability: An Analysis of the Consistency of Macroeconomic Policies in Mexico
March 1, 1992
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Summary
This paper uses a simple framework based on the government budget constraint to analyze the consistency of macroeconomic policies undertaken in Mexico during the period 1978 to mid-1991. It was found that the interaction between the actual implementation of economic policies and economic agents’ perceptions about the sustain-ability of those policies can account, to a large extent, for the behavior of key macroeconomic variables during the period under study. The paper also highlights the costs of adjustment involved in the most recent Mexican stabilization program arising from concerns about the sustainability of the announced policies.
Subject: Balance of payments, Capital outflows, Exchange rates, Financial services, Fiscal stance, Foreign exchange, Government debt management, Inflation, Prices, Public financial management (PFM), Real interest rates
Keywords: Capital outflows, economic activity, end-of-year inflation rate, Exchange rates, Government debt management, Inflation, Mexican peso, rate depreciation, rate of exchange, rate of inflation, Real interest rates, U.S. dollar, WP
Pages:
44
Volume:
1992
DOI:
Issue:
017
Series:
Working Paper No. 1992/017
Stock No:
WPIEA0171992
ISBN:
9781451843453
ISSN:
1018-5941
