Trends and cycles: How important are long- and short-run restictions? The case of Mexico

The document presents a test for the existence of binding long- and short-run (common trend-common cycle) restrictions in the dynamics of a set of Mexican macroeconomic variables. These restrictions are imposed in a VAR to decompose the series into their permanent and transitory components. The analysis shows that the magnitude of transitory (nominal) shocks is underestimated when such restrictions are not considered. In addition, we find that the timing and duration of recession and expansion periods are more accurately estimated when the trend-cycle decomposition is conducted with the imposition of cointegrating (long-run) and common feature (short-run) restrictions.

Restricciones de liquidez, canal de crédito y consumo en México

The document evaluates the importance of the credit market on consumption in Mexico. A test of the Permanent Income Hypothesis indicates that consumers face liquidity constraints. Considering financing to the private non-banking sector by commercial banks as well as the spread between borrowing and lending rates as proxies of credit market conditions, it is shown that these are important determinants of consumption. In addition, the document finds that there exists transmission mechanism of monetary policy, credit channel, for consumption.Liquidity constraints, consumption, credit market, monetary policy.

Efecto del gasto público sobre el gasto privado en México

Traditionally, the analysis of the impact of public expenditure on private expenditure has been performed via graphical evaluations and simple econometric exercises. In this document we present a detailed econometric analysis of the relationship between said variables. In particular, we evaluate the existence of a crowding out effect of public consumption and investment on private consumption and investment for the period 1980:I - 2002:II. The econometric results indicate that public investment crowds out private investment in the short-run but complements it in the long-run. In the case of private consumption we find statistically significant evidence of crowding out during the period of analysis.

Sincronización del empleo manufacturero en México y Estados Unidos

It is evident that there exists a high degree of economic interdependence betweenMexico and the United States at the aggregate level. It is not clear, however, that this relationship holds for individual economic sectors. In this document we investigate the existence of common movements, at trend and cyclical horizons, in the behavior of employment in the manufacturing sector for both countries.We find that employment in the non-maquila manufacturing sector in Mexico exhibits a higher degree of synchronization with the manufacturing employment in the U.S. than does the maquiladora sector.We argue that these results are consistent with the theories of economic integration and specialization in production.labor markets, common cycle, common trend.

Estructura de propiedad corporativa y crecimiento económico

En este documento se evalúa la relación entre el crecimiento económico y la forma deestructura de propiedad corporativa. Se considera una muestra de 26 países y variables explicativasque incluyen la inversión, la apertura, el nivel de educación y una medida de estructura que serefiere a la propiedad familiar. Los resultados indican una relación significativa y positiva entre elcrecimiento y las primeras tres variables. Con respecto a la variable de estructura, se aprecia una relaciónnegativa. Esto es, cuando en un país la propiedad empresarial se caracteriza por ser familiar,el desempeño de la economía agregada es débil; comparado con el mismo cuando la estructura depropiedad es más dispersa

Economic integration in North America: Learning from the experience of the European Union for the NAFTA

In this document we analyze, based on previous work from various authors, the degree of economic synchronization between Central and Eastern European countries and the European Union prior to the 2004 adhesion treaties. Then, we formally determine the degree of economic synchronization in North America for the nafta transitional period. In particular, we perform cointegration and common features tests for the gdps of Canada, Mexico and the US. We find that the economies of the region are highly integrated. Based on these results, and the facts identified for the European case, we discuss some possibilities for the evolution of nafta into a deeper form of economic integration.</span