Vol. 16 No. 32 (2020)

Artículos

Hysteresis and development trap in the Mexican economy in the era of the Covid19 crisis

Published 2020-10-28 — Updated on 2020-10-28

  • Verónica Cerezo Garcia
    • ,
  • Heri Óscar Landa Díaz
    • ,
  • Ignacio Perrotini Hernández

Verónica Cerezo Garcia
Programa de Posgrado en Economía de la Universidad Nacional Autónoma de México

Heri Óscar Landa Díaz
Departamento de Economía, Universidad Autónoma Metropolitana

Ignacio Perrotini Hernández
Programa de Posgrado en Economía de la Universidad Nacional Autónoma de México

Abstract

In this paper the hypothesis of the existence of both a poverty trap à la Nurkse (Nurkse (1952); Nurkse et al. (1953)) and a hysteresis phenomenon in the Mexican economy is dealt with theoretically and empirically. Such phenomena tend to magnify the economic effects imparted by the Covid19 sanitary crisis: there is a vicious circle configured by the interplay between a poverty trap and economic stagnation, whereby a low level of per capita income constrains the size of the market, voluntary savings and the incentives for investment. Likewise, the observed low levels of productivity and gross capital formation limit the expansion of the domestic market for the local manufacturing industry which is not part and parcel of the export-led growth model.

Keywords

Economic Development, Economic growth, Mexico, Health, Poverty

PDF (Spanish)

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