The challenge of economic growth in Mexico. Manufacturing industries and industrial policy

Abstract

The article focuses on a structural problem of the Mexican economy: low economic growth. It is argued that the manufacturing industries are the engine of economic growth. In this sense, it is assumed that one of them main causes of low growth in Mexico is the insufficient dynamic of the manufacturers. To verify the above, the authors used quarterly time series from 1982 to 2015, of the manufacturing output, non-manufacturing output, and total, through which they then proved stationarity and co-integration. They also applied a Granger causality test. The authors found that the manufacturing output series is a statistical effect of the non-manufacturing output and total, which is consistent with the sectorial-structural theoretical framework used as reference. Based on the results, the article discusses the current economic policy and recommends improvements, particularly in terms of procuring a more active focus in relation to promoting the development of the manufacturing output, to help the economy become more dynamic and enter a virtuous circle of cumulative causation.