Tijuana's Dynamic Unemployment and Output Growth

During the 1990's, Mexico successfully implemented a program of economic reforms and free trade aimed at a complete restructuring of its economy. Surprisingly, the reform process seems to have had little impact on unemployment. An analysis of trends indicates that, even in the worst years of economic crisis, average unemployment rates in Mexico did not exceed 7.4% (reached in the third quarter of 1995). Tijuana's unemployment rate averaged 0.725% in 2001, when the economy was experiencing the start of a recession and major structural reforms were expected. These figures seem very low when compared to those for other countries. This article's goal is to evaluate transitory demand shocks and permanent supply shocks in Tijuana's unemployment time series, as given by that identification restriction and the structural break unit root methodology. Okun's Law is also tested for the Tijuana unemployment series. Keywords: 1. unit root, 2. output, 3. unemployment, 4. Tijuana, 5. Mexico. Resumen: En la década pasada, México estableció un programa de reformas económicas y de libre comercio encaminadas a la completa reestructuración de su economía. Sorprendentemente, el proceso de reforma tiene poco impacto en el desempleo. Un análisis de las tendencias indica que, aun en los peores trimestres de la crisis económica, la tasa de desempleo promedio no fue mayor de 7.4%. La tasa de desempleo trimestral de la ciudad de Tijuana en 2001 alcanzó en promedio 0.725%, en un período donde inició una recesión en la economía. Estas cifras son bajas al ser comparadas con las de otros países. El objetivo del estudio es evaluar los choques transitorios de la demanda y los permanentes de la oferta en el desempleo en Tijuana en diferentes períodos. Para ello utiliza la restricción de identificación y la metodología de raíz unitaria con corte estructural. La ley de Okun también es verificada para conocer la evolución del desempleo en Tijuana. Palabras clave: 1. raíz unitaria, 2. producción, 3. desempleo, 4. Tijuana, 5. México.Artículo recibido el 5 de marzo de 2002.Artículo aceptado el 20 de noviembre de 2002.1. unit roots 2. output 3. unemployment 4. Tijuana 5. Mexico.

Convergence and Economic Growth considering Human Capital and R&D Spillovers Convergencia y Crecimiento Economico en Mexico considerando al Capital Humano y derrames en Investigacion y Desarrollo

In the recent growth literature, the accumulation of human capital and R&D have gained a central role. This study tries to narrow the bridge between the fields of regional convergence theory, economic growth and human capital. Unlike traditional economic growth theories, which tend to focus on exogenous comparative advantage or technological differences among regions as causes for growth, regional economic growth emphasizes the roles of increasing returns to scale in production, human capital and R&D in determining the growth of economic activities. In particular, I will consider the interaction of regional human capital and R&D economics following the recent work in economic growth and convergence. Using the recent developments in economic growth, the study centers on the regional convergence pattern in Mexico emphasizing the effects of human capital, R&D and interregional spillovers on growth. The findings suggest the existence of some human capital and bounded knowledge spillovers across regional states in Mexico. En la literatura del crecimiento, la acumulación del capital humano y la investigación y desarrollo tienen un papel central. El estudio trata de cerrar la brecha entre el campo de la convergencia, el crecimiento económico y el capital humano. A diferencia de las teorías tradicionales del crecimiento, que se centran en las ventajas comparativas y las diferencias tecnológicas entre las regiones como los determinantes del crecimiento, las nuevas teorías del crecimiento regional enfatizan el papel de los retornos crecientes a escala en la producción, el capital humano y la investigación y desarrollo para determinar el crecimiento de las actividades económicas. En particular, el estudio considera la interacción entre el capital humano y la investigación y desarrollo en el ámbito regional, siguiendo los estudios recientes en el campo del crecimiento económico y la convergencia económica. El estudio se centra en el patrón de convergencia para México, al enfatizar los efectos del capital humano, la investigación y desarrollo y las derramas interregionales en el crecimiento. Los resultados sugieren que existen derrames en el capital humano pero restricciones en la actividad de investigación y desarrollo regional para los estados de México.Economic Growth, Mexico, Spillovers, Human Capital

Mexico’s Industrial Engine of Growth: Cointegration and Causality

The present study applies the techniques of cointegration and Granger causality to examine the causal relationship between industrial growth and overall economic performance in the Mexican economy. The empirical evidence presented in the paper tries to find support in Mexico for the Kaldor’s engine of economic growth hypothesis.Cointegation, Causality, Economic Growth, Mexico.

Regional Convergence of Income and Labor Productivity in Mexico

Economic growth continues to be a major objective of state governments in Mexico. What role do firm location, openness, education, and wage rates play in determining the ability of a state to increase the growth of its economy? This study examines the economic competitiveness of the Mexican states using location coefficients. This paper tries to bridge the gap between the macroeconomic issue of convergence on the aggregate income level and the microeconomic issue of labor productivity convergence on the industry and sectorial level. Resumen. El crecimiento económico continua siendo uno de los objetivos más importantes para los gobiernos estatales en México. ¿Cuál es el papel de la localización de las empresas, la apertura, la educación y los salaries en determinar la habilidad de los estados para fomentar el crecimiento de la economia? El estudio examina la competitividad de los estados en México mediante el uso de índices de localización. El estudio trata de cerrar la brecha entre el tema de la convergencia macroeconómica en el nivel agregado del ingreso y los temas microeconómicos de la convergencia de la productividad laboral a nivel sectorial e industrial.Economic Convergence, Labor Productivity, location coefficients, Mexico

The role of telecommunications infrastructure and human capital: Mexico´s economic growth and convergence

Understanding the sources of regional economic growth in Mexico is important. Hence, in this paper, I will briefly discuss developments in the theory of economic growth and discuss the theoretical work in the Mexican context, and review some of the more recent empirical studies dealing with public infrastructure and economic growth. The development of regions in the periphery is of special concern to the development of the Mexican Economy. The regional planning approach in Mexico emphasizes strategic, geographically-focused investments in infrastructure, and the application of industrial policies to influence the location of industries and foster the development of inter-industry linkages. The Mexican states are diverse in terms of geographic, demographic, and economic characteristics. Between the 1980's and the 2000's, the lagging regions of the south remained among the poorest, while the regions with above average per capita incomes remained in the North and in the area near Mexico City. However, there is adequate evidence to suggest the existence of and increase in regional disparities in Mexico. For example, Diaz-Bautista (2000) showed regional output disparities among selected states in Mexico. The objectives of this paper are twofold. First, the relationship between public policies and regional growth in Mexico is examined. This includes a discussion on the effects of infrastructure on regional development. Second, the role of public investments in the development of the Mexican states is also examined. The specific question addressed is whether the varying incidence of public infrastructure investments influenced the development patterns of lagging, intermediate and leading states. This paper is divided into four main parts. The first part provides the background and motivation for the study. The second part highlights the need to examine regions as the unit of analysis and reviews the literature of the relationship between infrastructure investments and regional growth. The third part examines the efficacy of infrastructure investments in the development of the Mexican states. This section presents the data, choice of methodology, model specification, the econometric model and the results from the empirical analysis. The final section presents some policy implications and directions for future research.

Fuzzy set applications in engineering optimization: Multilevel fuzzy optimization

A formulation for multilevel optimization with fuzzy objective functions is presented. With few exceptions, formulations for fuzzy optimization have dealt with a one-level problem in which the objective is the membership function of a fuzzy set formed by the fuzzy intersection of other sets. In the problem examined here, the goal set G is defined in a more general way, using an aggregation operator H that allows arbitrary combinations of set operations (union, intersection, addition) on the individual sets Gi. This is a straightforward extension of the standard form, but one that makes possible the modeling of interesting evaluation strategies. A second, more important departure from the standard form will be the construction of a multilevel problem analogous to the design decomposition problem in optimization. This arrangement facilitates the simulation of a system design process in which different components of the system are designed by different teams, and different levels of design detail become relevant at different time stages in the process: global design features early, local features later in the process

Latin American Debt: I Don't Think We Are in Kansas Anymore

macroeconomics, international, Latin America, debt, recession