Home » Gdp Growth, Potential Output, and Output Gaps in Mexico by Ebrima Faal
Gdp Growth, Potential Output, and Output Gaps in Mexico Ebrima Faal

Gdp Growth, Potential Output, and Output Gaps in Mexico

Ebrima Faal

Published May 1st 2005
ISBN : 9781283512169
ebook
32 pages
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This paper analyzes the sources of Mexicos economic growth since the 1960s and compares various decompositions of historical growth into its trend and cyclical components. The role of the implied output gaps in the inflationary process is thenMoreThis paper analyzes the sources of Mexicos economic growth since the 1960s and compares various decompositions of historical growth into its trend and cyclical components. The role of the implied output gaps in the inflationary process is then assessed. Looking ahead, the paper presents medium-term paths for GDP based on alternative assumptions for productivity growth rates. The results indicate that the most important factor underlying the slowdown in output growth was a decline in trend total factor productivity growth. Economic policy reforms and the introduction of NAFTA may have raised trend productivity growth in recent years. Further increases in productivity growth would appear necessary, however, to raise medium-term growth.