From the Debt Crisis toward Economic Stability: An Analysis of the Consistency of Macroeconomic Policies in Mexico

March 1, 1992

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Liliana Rojas-Suárez. From the Debt Crisis toward Economic Stability: An Analysis of the Consistency of Macroeconomic Policies in Mexico, (USA: International Monetary Fund, 1992) accessed September 27, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

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

Publication Details

Pages:

44
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1992/017
Stock No:

WPIEA0171992
ISBN:

9781451843453
ISSN:

1018-5941

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