Why have economic reforms in Mexico not generated growth?

Timothy J. Kehoe, Kim J. Ruhl

Research output: Contribution to journalArticle

28 Scopus citations

Abstract

Following its opening to trade and foreign investment in the mid-1980s, Mexico's economic growth has been modest at best, particularly in comparison with that of China. Comparing these countries and reviewing the literature, we conclude that the relation between openness and growth is not a simple one. Using standard trade theory, we find that Mexico has gained from trade, and by some measures, more so than China. We sketch out a theory in which developing countries can grow faster than the United States by reforming. As a country becomes richer, this sort of catch-up becomes more difficult. Absent continuing reforms, Chinese growth is likely to slow down sharply, perhaps leaving China at a level less than Mexico's real GDP per working-age person.

Original languageEnglish (US)
Pages (from-to)1005-1027
Number of pages23
JournalJournal of Economic Literature
Volume48
Issue number4
DOIs
StatePublished - Dec 1 2010

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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