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Economic Integration Mexico-United States and Regional Performance in Mexico

Author

Listed:
  • Torre Cepeda Leonardo E.
  • Chapa Cantú Joana C.
  • González González Eva Edith

Abstract

Based on the World Input-Output Matrix 2016 estimated by Timmer et al. (2016), the Hypothetical Extraction Method is applied in a multi-country context to estimate Mexico's gross output and value added linked to the economic activity of the United States; and then the gross output and value added of the United States linked to Mexico's economic activity. Next, it is shown based on the Ghosh Regional Model how the value added of Mexico linked to the economic activity in the United States is allocated among its sectors and regions. The results capture the strong economic linkage between both economies at the aggregate level, as well as its sectoral concentration. The results also indicate that the Northern and Central regions of Mexico are those with the strongest link to the United States; followed by the Southern region, where the largest share of the oil industry is located.

Suggested Citation

  • Torre Cepeda Leonardo E. & Chapa Cantú Joana C. & González González Eva Edith, 2020. "Economic Integration Mexico-United States and Regional Performance in Mexico," Working Papers 2020-06, Banco de México.
    • Handle: RePEc:bdm:wpaper:2020-06
    as

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    File URL: https://www.banxico.org.mx/publicaciones-y-prensa/documentos-de-investigacion-del-banco-de-mexico/%7B7554A6D1-ED34-F5BB-5F24-22E5D06BA61C%7D.pdf
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    References listed on IDEAS

    as
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    8. Timmer, Marcel P. & Los, Bart & Stehrer, Robert & de Vries, Gaaitzen J., 2016. "An Anatomy of the Global Trade Slowdown based on the WIOD 2016 Release," GGDC Research Memorandum GD-162, Groningen Growth and Development Centre, University of Groningen.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Hypothetical Extraction; Ghosh Input-Output Model; World Input-Output Matrix; Mexico; United States; Economic Integration;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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