Abstract

OCEGUEDA HERNANDEZ, Juan Manuel. Trade Liberalization and Economic Growth in Mexico's Regions. Inv. Econ [online]. 2007, vol.66, n.262, pp.89-137. ISSN 0185-1667.

The paper assesses the effects of trade liberalization over regional economic growth in Mexico by using an alternative method to that applied in beta and sigma convergence analysis. Following the post-keynesian literature suggesting that long run potential growth depends on foreign demand elasticity of domestic output, the paper estimates the change in the foreign-trade dynamic multiplier across states and regions in the period 1970-1984 and in that of post-trade liberalization (1985-2004). The findings suggest that the growth potential of regions changed following different patterns across regions, for instance, the Northern Border states and some Central states have been the winners, while the economic and social cost of trade liberalization have been dispersed in the rest of the country, mainly in the states of Southern, Gulf of Mexico and Pacific regions.

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