Abstract

ACEVEDO FERNANDEZ, Ernesto. Potential GDP and Total Factor Productivity: Recessions and Expansions in Mexico. Econ. mex. Nueva época [online]. 2009, vol.18, n.2, pp.175-219. ISSN 1665-2045.

Potential GDP and the NAIRU of Mexico are estimated using a Cobb-Douglas production function combined with a Kalman filter, under the assumption of three different behaviors of total factor productivity. A growth accounting exercise is carried out to identify the factor contribution of labor and capital. Results show that during 2006-2007 potential growth of Mexico was between 3.7 and 4.3 per cent. The economic cycles experienced in Mexico are characterized, and its recessions and expansions are dated. During 1980-2007 economic recessions and expansions lasted on average 7.0 and 13.3 quarters, respectively; that means recessions in Mexico are 121.1 per cent longer than in the US, while expansions are 46.8 per cent shorter. As a consequence of economic recessions, Mexico lost 16.1 per cent of its GDP and more than 1.2 million workers were fired.

Keywords : Potential GDP; output gap; growth accounting; economic cycles; expansions; recessions.

        · abstract in Spanish     · text in Spanish     · Spanish ( pdf )