We develop an endogenous growth model with three goods, exportable, importable and non-tradable. We study the response of the real exchange rate and of the economy growth rate to a decrease in the tariff rate. We show that trade liberalization must be followed by a depreciation of the real...

This study decomposes both the labor productivity gap and the labor productivity growth into the contributions of technical efficiency, capital deepening and technological change for Mexican manufacturing at the regional level. In order to do so, we apply a methodology that combines two...