Abstract

MORENO BRID, Juan Carlos. Trade Liberalization and Import Demand in Mexico. Inv. Econ [online]. 2002, vol.62, n.240, pp.13-50. ISSN 0185-1667.

Based on the standard Jog linear model -but revised to include import licensing- this paper examines whether Mexico' s trade liberalization strategy, firmly implemented from 1985-86 onwards, has been associated with a structural break in import demand. The results of the analysis carried out suggest a break in Mexican import demand coincident with the opening of its domestic market. The evidence indicates that there has been an increase in its income elasticity and a decline in its price elasticity. Such changes may be important for policy considerations, in particular, they may help to better estimate Mexico's foreign exchange requirements under different paths of expansion of domestic demand.

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