Handbook of Economic Stagnation

Chapter Eleven: Mexico

unequal integration and “stabilizing stagnation”

Robert A. Blecker      Department of Economics, American University, Washington, DC, United States

Abstract

This chapter analyzes the underlying causes of the long-term stagnation of the Mexican economy, especially since the country restored conventional macroeconomic stability in the late 1990s. First, the chapter documents the disappointing growth of Mexico compared to other middle-income countries. The chapter then considers, but ultimately rejects, neoclassical explanations that focus on supply side obstacles and incentives. Especially, the high degree of dualism (informalization) of the Mexican economy is a consequence, rather than an explanation, of the slow ...