Structural vulnerability of the Mexican economy before the crisis induced by the COVID-19 pandemic

Abstract

The paper assesses the structural fragility of Mexico's economy at the outbreak of the Covid-19 sanitary crisis. Following Chenery and Watanabe (1956), Rasmussen (1963) and Laumas (1976), indexes of both backward and forward linkages of the manufacturing industrial sector are estimated. The empirical analysis revealed that the economy's vulnerability at the moment the pandemic stroke the country is rooted in the latter's high technological dependence, the domestic industrial sector's weak linkages and, last but no least, Mexico's highly concentrated exports in the world economy. These very same structural features will, ceteris paribus, also determine the velocity, timing, and strength of the recovery from the crisis and the convergence to the path the economy exhibited prior to the Covid-19 shock.