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The Mexican Economy: ¡Sí se puede!. Jorge G. Gonzalez Trinity University. Recent Economic and Political Events. Economic growth in the U.S. Government gridlock Presidential campaigns Mexico – U.S. relationship. Immigration Debate. Pros: Shortage of labor in U.S. & surplus in Mexico
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The Mexican Economy: ¡Sí se puede! Jorge G. Gonzalez Trinity University
Recent Economic and Political Events • Economic growth in the U.S. • Government gridlock • Presidential campaigns • Mexico – U.S. relationship
Immigration Debate • Pros: • Shortage of labor in U.S. & surplus in Mexico • U.S. benefits from their labor • Mexico benefits from remittances • Cons: • Effects on low-skilled natives • Effects on local budgets
Vital Signs • Is the link alive?
Industrial Production Index(January 2000 = 100) Source: Banco de México and FED www.banxico.org.mx; www.federalreserve.gov
Vital Signs • Is the link alive? • GDP growth
Real GDP% yearly change Source: INEGI www.inegi.gob.mx
Vital Signs • Is the link alive? • GDP growth • Foreign direct investment
Foreign Direct InvestmentBillions of Dollars Source: Banco de México www.banxico.org.mx
Debt Market Foreign InvestmentBillions of Dollars Source: Banco de México www.banxico.org.mx
Stock Market Foreign InvestmentBillions of Dollars Source: Banco de México www.banxico.org.mx
Vital Signs • Is the link alive? • GDP growth • Foreign direct investment • Super Peso and foreign sector
Exchange RatePesos per U.S. Dollar Source: Banco de México www.banxico.org.mx
Exchange RatePesos per U.S. Dollar Source: Banco de México www.banxico.org.mx
Inflation Differential vs. Exchange Rate 317 Inflation 219 Exchange Rate Source: Banco de México www.banxico.org.mx
Merchandise TradeBillions of Dollars Imports Exports Source: Banco de México www.banxico.org.mx
Family RemittancesBillions of Dollars Source: Banco de México www.banxico.org.mx
Vital Signs • Is the link alive? • GDP growth • Foreign direct investment • Super Peso and foreign sector • Federal government balance
Government BalanceBalance / GDP Source: SHCP www.shcp.gob.mx
Vital Signs • Is the link alive? • GDP growth • Foreign direct investment • Super Peso and foreign sector • Federal government balance • War on inflation
Inflation Source: Banco de México www.banxico.org.mx
Vital Signs • Is the link alive? • GDP growth • Foreign direct Investment • Super Peso and foreign sector • Federal government balance • War on Inflation
Political Environment Andrés López Obrador Felipe Calderón Roberto Madrazo
Political Environment Source: El Norte, April 25, 2006 www.elnorte.com
President Fox’s Sexenio • Separation of Powers • Economic Stability • Poverty Reduction • Freedom of the Press • No Major Economic Reforms
Economic Reform: ¿Sí se puede? • Fiscal System, Energy Sector, and Labor Laws • Domestic Antitrust and Competition • War on Poverty • Rule of Law • North American Union?
The Mexican Economy: ¡Sí se puede! www.trinity.edu/jgonzal1 jorge.gonzalez@trinity.edu