The Mexican Economy:

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The Mexican Economy Sí se puede!
Jorge G. Gonzalez Trinity University
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Recent Economic and Political Events

• Economic growth in the U.S.
• Government gridlock
• Presidential campaigns
• Mexico U.S. relationship

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Immigration Debate

• Pros
• Shortage of labor in U.S. surplus in Mexico
• U.S. benefits from their labor
• Mexico benefits from remittances
• Cons
• Effects on low-skilled natives
• Effects on local budgets

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Vital Signs

• Is the link alive?

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Industrial Production Index(January 2000 100)
Source Banco de México and FED
www.banxico.org.mx www.federalreserve.gov
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Vital Signs

• Is the link alive?
• GDP growth

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Real GDP yearly change
Source INEGI www.inegi.gob.mx
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Vital Signs

• Is the link alive?
• GDP growth
• Foreign direct investment

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Foreign Direct InvestmentBillions of Dollars
Source Banco de México
www.banxico.org.mx
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Debt Market Foreign InvestmentBillions of
Dollars
Source Banco de México
www.banxico.org.mx
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Stock Market Foreign InvestmentBillions of
Dollars
Source Banco de México
www.banxico.org.mx
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Vital Signs

• Is the link alive?
• GDP growth
• Foreign direct investment
• Super Peso and foreign sector

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Exchange RatePesos per U.S. Dollar
Source Banco de México
www.banxico.org.mx
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Exchange RatePesos per U.S. Dollar
Source Banco de México
www.banxico.org.mx
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Inflation Differential vs. Exchange Rate
317
Inflation
219
Exchange Rate
Source Banco de México
www.banxico.org.mx
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Merchandise TradeBillions of Dollars
Imports
Exports
Source Banco de México
www.banxico.org.mx
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Family RemittancesBillions of Dollars
Source Banco de México
www.banxico.org.mx
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Vital Signs

• Is the link alive?
• GDP growth
• Foreign direct investment
• Super Peso and foreign sector
• Federal government balance

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Government BalanceBalance / GDP
Source SHCP www.shcp.gob.mx
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Vital Signs

• Is the link alive?
• GDP growth
• Foreign direct investment
• Super Peso and foreign sector
• Federal government balance
• War on inflation

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Inflation
Source Banco de México
www.banxico.org.mx
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Vital Signs

• Is the link alive?
• GDP growth
• Foreign direct Investment
• Super Peso and foreign sector
• Federal government balance
• War on Inflation

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Political Environment
Andrés López Obrador
Felipe Calderón
Roberto Madrazo
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Political Environment
Source El Norte, April 25, 2006
www.elnorte.com
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President Foxs Sexenio

• Separation of Powers
• Economic Stability
• Poverty Reduction
• Freedom of the Press
• No Major Economic Reforms

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Economic Reform Sí se puede?

• Fiscal System, Energy Sector, and Labor Laws
• Domestic Antitrust and Competition
• War on Poverty
• Rule of Law
• North American Union?

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The Mexican Economy Sí se puede!
www.trinity.edu/jgonzal1
jorge.gonzalez_at_trinity.edu