A notable feature of the Mexican economy since the late 1980s was the persistent real appreciation of the peso. The appreciation - a key development that helps to explain Mexico's slow rate of economic growth - took place despite changes in the exchange-rate regime, yet with an unchanging focus...

Despite two positive developments - the rise of manufactured exports and a prolonged but eventually successful disinflation - Mexico failed to sustain a high rate of economic growth during its free-trade period 1988-2006. The paper argues that the proximate cause of Mexico's growth failure is...

Based on the so-called bounds testing approach, the paper studies the long-run effect of capital flows and the real exchange rate on Mexico’s private investment from 1988 through 2008, presenting two main results. First, while capital inflows can potentially increase investment, in practice...

Based on the so-called bounds testing approach, the paper studies the long-run effect of capital flows and the real exchange rate on Mexico’s private investment from 1988 through 2008, presenting two main results. First, while capital inflows can potentially increase investment, in practice...

Following the recently-developed bounds testing approach, the paper analyzes the long-run determinants of the Mexican peso’s real exchange rate from 1988Q1 to 2008Q2. Controlling for the standard determinants, the paper shows that all types of capital inflows tended to appreciate the peso. In...