Abstract

GUERRERO-DE-LIZARDI, Carlos. Potential GDP and business cycle in Mexico 1921-2019: a “measurement in economics” perspective. Rev. mex. econ. finanz [online]. 2020, vol.15, n.2, pp.185-204.  Epub Nov 25, 2020. ISSN 2448-6795.  https://doi.org/10.21919/remef.v15i2.483.

Our objective is to evaluate three methodologies to estimate the potential GDP and the signals labeled as cycle and gap (of the SHCP, the Bank of Mexico and our owns). To achieve this, we describe their methodologies and present our own results. Based on the set of signals extracted, we developed, as the main result, an interpretation of the performance of the economy between 1922 and 2018. We share some short and long term policy recommendations. Our main limitation lies in the review of just three methodologies, of the many described in the literature, involving a selection based on local criteria. Our work is original since we study the longest period possible, because we replicate and present variations to the methodologies of the SHCP and the Bank of Mexico, and to the extent that we explain all the decisions made and make the data available to the reader. In this sense we apply the golden rule of any science. Our main conclusion implies a certain view regarding the microeconomic and macroeconomic performance observed in recent decades.

Keywords : E01; E32; E37; O40; O54; level and change; potential output and GDP; measurement in economics.