Abstract

LORIA, Eduardo. Causes of the slow rate of economic growth in Mexico: A structural explanation. Inv. Econ [online]. 2009, vol.68, n.270, pp. 37-68. ISSN 0185-1667.

The Mexican economy began a slowdown pace of economic growth in the early 1980s. We estimate a production function -augmented by the real exchange rate- whereby it is shown that the main cause of such slow performance stems from a sharp reduction in total factor productivity, which in turn is associated with an unproductive tertiarization process. The overall deterioration of the institutional framework seems to be highly correlated with this outcome ever since the investment efficiency decreased.

Keywords : growth strategy; production function augmented by the real exchange rate; total factor productivity; efficiency of investment; non-productive tertiarization; co-integration; exogeneity.