Abstract

VAZQUEZ MUNOZ, Juan Alberto  and  AVENDANO VARGAS, Blanca Lilia. ¿Export Led Growth or Export led Stagnation? The Case of Mexico, 1961-2010. Inv. Econ [online]. 2012, vol.71, n.282, pp.93-108. ISSN 0185-1667.

We present a little modification of the Thirlwall's law through the consideration of the import requirements of the export sector; specifically we introduce the idea of the export elasticity of the demand of imports. Given a rate of growth of the exports and an income elasticity of the demand of imports, a higher export elasticity of the demand of imports implies a lower rate of growth consistent with the balance of payments. This argument is corroborated empirically for the case of the Mexican economy that exhibited almost the same rate of growth of the exports and income elasticity of the demand of imports during the North American Free Trade Agreement (NAFTA) period in comparison with the 1961-1981 period but its rate of growth consistent with the balance of payments was strongly reduced because its export elasticity of the demand of imports was deeply increased.

Keywords : Thirlwall's law; export-led growth; NAFTA; maquila export sector; export elasticity of the demand of imports; Mexico.