Money demand and financial liberalization in Mexico: A cointegration approach

This paper examines the long run dynamics of Mexico’s money demand using Johansen’s cointegration approach with different specifications. The empirical evidence indicates that real balances, real income and the interest rate are cointegrated in all subperiods. The findings suggest that recent changes in economic policy through financial liberalization affected money demand functions; this due to the fact that income elasticity fell down during the transition through the subperiods, but simultaneously this did not affect the functional stability. The cointegrated coefficient on currency-money ratio (M0/M1) suggests that when the ratio falls, the demand for money falls too. Nevertheless, this last evidence is statistically weak. In addition, it was determined that alternative equations are not better than the conventional ones.Money demand, financial liberalization, cointegration, error correction mechanism, currency-money ratio, Mexico

Mexican Real Wages Before the Revolution: A Reappraisal

Seminal literature has documented broadly the living conditions of Mexican workers before the Revolution of 1910. Various authors argue that a continuous deterioration of real wages in the preceding years of the Mexican revolution contributed to the social unrest that lead to the armed conflict. Yet, most of the quantitative evidence has focused on aggregate estimates overlooking the regional wage dynamics. Through regional historical data, this article reevaluates quantitatively the patterns of Mexican regional real wages providing new estimates for the period 1877-c.1910. The analysis reveals that a divergent pattern between sectors and regions emerged during these years. However, the study also shows that in general, locally-adjusted regional real wages remained relatively stable throughout the period

Demanda de dinero y liberalizacion financiera en Mexico: Un enfoque de cointegracion

This paper examines the long run dynamics of Mexico’s money demand using Johansen’s cointegration approach with different specifications. The empirical evidence indicates that real balances, real income and the interest rate are cointegrated in all subperiods. The findings suggest that recent changes in economic policy through financial liberalization affected money demand functions; this due to the fact that income elasticity fell down during the transition through the subperiods, but simultaneously this did not affect the functional stability. The cointegrated coefficient on currency-money ratio (M0/M1) suggests that when the ratio falls, the demand for money falls too. Nevertheless, this last evidence is statistically weak. In addition, it was determined that alternative equations are not better than the conventional ones

Demanda de dinero y liberalizacion financiera en Mexico: Un enfoque de cointegracion

This paper examines the long run dynamics of Mexico’s money demand using Johansen’s cointegration approach with different specifications. The empirical evidence indicates that real balances, real income and the interest rate are cointegrated in all subperiods. The findings suggest that recent changes in economic policy through financial liberalization affected money demand functions; this due to the fact that income elasticity fell down during the transition through the subperiods, but simultaneously this did not affect the functional stability. The cointegrated coefficient on currency-money ratio (M0/M1) suggests that when the ratio falls, the demand for money falls too. Nevertheless, this last evidence is statistically weak. In addition, it was determined that alternative equations are not better than the conventional ones