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Effects of the Great Recession on state output in Mexico

Author

Listed:
  • Pablo Mejia-Reyes

    (Universidad Autonoma del Estado de Mexico)

  • Miguel Angel Diaz-Carreno

    (Universidad Autonoma del Estado de Mexico)

Abstract

This paper investigates the effects of a battery of variables on total and sector output drops in the Mexican states during the Great Recession by estimating spatial and cross-section regression models. Our main results can be summarized as follows. First, there is evidence of spatial autocorrelation only in the case of total production and it seems to be negative, which does not support the hypothesis of interstate transmission of the recession. Second, total and sector production falls can be explained by the specialization in the production of tradable (mainly durable) goods. Third, exposure to external shocks plays an important role in the cases of industrial and services production, but not in total output. Fourth, there seems to be that federal fiscal policy has actually been pro-cyclical while state fiscal policies have contributed to mitigate the recession.

Suggested Citation

  • Pablo Mejia-Reyes & Miguel Angel Diaz-Carreno, 2015. "Effects of the Great Recession on state output in Mexico," EconoQuantum, Revista de Economia y Finanzas, Universidad de Guadalajara, Centro Universitario de Ciencias Economico Administrativas, Departamento de Metodos Cuantitativos y Maestria en Economia., vol. 12(2), pages 25-45, Julio-Dic.
    • Handle: RePEc:qua:journl:v:12:y:2015:i:2:p:24-45
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    File URL: http://econoquantum.cucea.udg.mx/index.php/EQ/article/view/4859
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    File URL: http://econoquantum.cucea.udg.mx/index.php/EQ/issue/view/430
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Regional Business Cycles; Great Recession; Spatial Regression.;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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