This Selected Issues paper analyzes reserve adequacy in Mexico. Reserve adequacy has been of renewed interest, as the authorities have introduced a new rules-based mechanism of U.S. dollar sales to reduce the rate of reserve accumulation. The paper examines the recent experience with Mexico’s...

This Selected Issues paper analyzes external shocks and business cycle fluctuations in Mexico. The paper examines the relative importance of U.S. demand shocks—and other foreign disturbances—in explaining Mexican output fluctuations. It identifies the dynamic response of Mexico’s output to...

This 2016 Article IV Consultation highlights that Mexico has navigated successfully a complex external environment, characterized by heightened global financial-market volatility. The economy continues to grow at a moderate pace, and inflation is close to the target. The flexible exchange rate...

This Report on the Observance of Standards and Codes (ROSC) Data Module provides an assessment of Mexico's macroeconomic statistics against the Special Data Dissemination Standard (SDDS) complemented by an assessment of data quality based on the IMF's Data Quality Assessment Framework (DQAF)...

Concluding Remarks This note analyzed the recent fiscal reforms, which can make the fiscal framework more instrumental in addressing challenges that Mexico will likely face in coming years. Mexico would benefit from building of fiscal policy buffers to reduce the exposure to high financing and...

KEY ISSUES Context: Over the past year, Mexico has maintained macroeconomic stability and has made significant progress in advancing growth-oriented structural reforms. The country’s close ties with the global economy, while a source of strength, heighten the economy’s exposure to external...

EXECUTIVE SUMMARY ? Background and Outlook. Mexico has been resilient to global uncertainty, in large part due to confidence in the strong policy framework and sound policy management, which are underpinned by a broad consensus about macroeconomic stability and by the signaling and insurance...

While inflation slowed sharply in Mexico during 1988, imports surged. Although the growth of domestic absorption could be attributed to a higher fiscal deficit, deriving from sharply higher domestic interest rates, this paper argues that the recovery of private investment was the main driving...

This paper estimates a speculative attack model of currency crises in order to identify the role of economic fundamentals and any early warning signals of a potential currency crisis. The data from the Mexican economy was used to illustrate the model. Based on the results, a deterioration in...

We construct a dynamic general equilibrium model of an open economy and use it to examine issues of trade liberalization in Mexico. In particular, we consider the fiscal implications of quotas and tariffs and, accordingly, their removal. We show that, in the short run, there may be negative...