MANUFACTURING INVESTMENT AND THE SLOW PACE OF THE MEXICAN ECONOMY SINCE 1993

Abstract

Mexico's output, factorial productivity, employment and gross capital formation have grown slowly during the last few decades. Economic policies have emphasized keeping the fiscal balance, leaving aside growth and -even more- development. Public investment has not determined the system's dynamics: Private investment has been sluggish. As many papers show, the productive sector maintains many features that correspond to the industrialisation period, while there are no factors to solve its main structural failures. All that after a long period of fast growth of manufacturing exports and the efforts to integrate the economy with that of the US. Such have been the goals of the long-term strategy. This paper explores the behaviour of gross capital formation over a long-time horizon from a multisectoral perspective, emphasising the study of the manufacturing industry since the expanding manufacturing exports characterise the economic evolution in the last few decades.