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Capital accumulation, economic growth and the balance-of-payments constraint: The case of Mexico, 1951-2014

Author

Listed:
  • Ignacio Perrotini Hernández

    (Universidad Nacional Autónoma de México)

  • Juan Alberto Vázquez-Muñoz

    (Universidad Autónoma de Puebla)

  • María Isabel Angoa Pérez

    (Universidad Autónoma de México)

Abstract

After a critical assessment of both Thirlwall’s long-run growth model and Clavijo’s and Ros’s (2015) model where capital accumulation determines output growth, this paper displays an alternative model in which capital accumulation and the growth rate of capital productivity determine the long-run growth rate of output which is consistent with a constant position of the balance of payments as a percentage of GDP. Then, the latter is applied to inquire the causes accounting for Mexico’s low economic growth rate during 1982-2014. We conclude, on empirical grounds, that the sharp decline in the internal demand for domestic goods and both the rates of net capital accumulation and productivity played a major role in the slowdown of the Mexican economy. The income elasticities of the demand for exports and imports also played a role, albeit to a lesser extent.

Suggested Citation

  • Ignacio Perrotini Hernández & Juan Alberto Vázquez-Muñoz & María Isabel Angoa Pérez, 2019. "Capital accumulation, economic growth and the balance-of-payments constraint: The case of Mexico, 1951-2014," Nóesis. Revista de Ciencias Sociales y Humanidades, Nóesis. Revista de Ciencias Sociales y Humanidades, vol. 28, pages 38-63, 55.
    • Handle: RePEc:cjz:noesis:355
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    References listed on IDEAS

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    1. Irfan Civcir & M. Emir Yücel, 2020. "Effects of Internal and External Imbalances and the Role of Relative Prices on Economic Growth: Evidence From Turkey," SAGE Open, , vol. 10(2), pages 21582440209, June.

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    Keywords

    Capital accumulation; growth; balance of payments.;
    All these keywords.

    JEL classification:

    • Z10 - Other Special Topics - - Cultural Economics - - - General

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