Balance-of-payments constrained economic growth: the case of Mexico

Article Abstract:

An analytical model for balance-of-payment constraints has been developed to analyze the economic crisis which swept the entire Mexican region during the early 1980s. Analytical results suggest that a modification of the long-term income multipliers of the proposed framework may be effected by implementing a long-term constant ratio of the current account to nominal gross domestic product. It was further shown that Mexico's economic instability was largely caused by the inadequacy of foreign exchange resources necessary in driving domestic growth.

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The role of foreign direct investment in a globalizing economy

Article Abstract:

Economic globalization has magnified the effect of fixed direct investment on growth and labor allocation. The phenomenon, which involves the interrelationship among economic events in trading economies, benefits most from foreign investment when barriers to trade exist. Furthermore, in cases where no such barriers exist, investment enhanced trade. The complementary and supportive relationship between trade and investment is most evident in the activities of multinational enterprises.

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The balance-of-payments constraint: from balanced trade to sustainable debt

Article Abstract:

This paper shows how trade parameters, foreign conditions and trade ratios determine a sustainable foreign debt and income ratio in a country, and whether that country can control business fluctuations and relative prices.

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