Abstract

MICHEL PADILLA, Roberto. Mexico: the economy of the institutional sectors, income distribution, savings and growth. Inv. Econ [online]. 2003, vol.63, n.243, pp.155-211. ISSN 0185-1667.

An analysis of Mexico's national accounts by institutional sector led to the discovery of a relationship of perfect substitution between foreign and national savings. Changes in the availability of foreign savings generate, by means of different mechanisms, variations in the participation of salaries and the dividends of products and its propensities for consumption in the same direction, and in the opposite direction in the internal savings of companies. The causal relationship is clear: when foreign savings are more available, households dispose of a higher income and consumption rates are higher, not the other way around. By means of a reformulation of the N. Kaldor (1955) model, in order to include foreign savings and differentiating the earnings between dividends and retained winnings, econometrically speaking the relationship between the coefficients of investment, foreign savings and dividends on the one hand, and the distribution of income between salaries and earnings on the other, are being formalised and estimated. The strategic importance that the economic behaviour of the company directors, manifested in the decisions concerning investment and the propensity to distribute winnings/earnings, exercises on economic growth, income distribution, consumption, savings and payment balance, stands out. Till now, Mexico has indebted itself with the exterior in order to increase consumption instead of its productive capacity.