Abstract

ALMENDRA-ARAO, Genaro; GONZALEZ-ESTRADA, Adrián  and  MORA-FLORES, José S.. Economic cycles of Mexico and their empirical regularities. Agrociencia [online]. 2008, vol.42, n.3, pp.299-311. ISSN 2521-9766.

Although the financial and social costs of Mexico's economic crises are enormous, they have not been studied in depth. The objective of this research was to study empirical regularities of Mexico's economic cycles. Using the Hodrick-Prescott method, time series of macroeconomic variable were filtered, comovements of the cyclical components of macroeconomic variables were studied and compared with the cyclical component of the real GNP. It was found that investment is more volatile than GNP, prices are acyclical, and investment and consumption are procyclical and highly correlated with GNP, while the investment cycle is contemporary to the GNP cycle. These results are consistent with predictions of the theory of real economic cycles and coincide with the regularities observed in economies of the USA and in those of other developing countries. Mexican anticyclical macroeconomic policies, in spite of their social cost, have not had any effect in attenuating cyclical fluctuations. Macroeconomic policy, when it does not encourage technical change and productivity, has important negative effects.

Keywords : Economic crisis; Hodrick-Prescott filter; cyclical fluctuations; theory of economic cycles.

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