Fiscal Policy in Mexico: The FitzGerald Thesis Reexamined
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Authors
Looney, R.E.
Fredericksen, P.C.
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Date of Issue
1987
Date
1987
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Abstract
Interest continues in the Mexican government's finance and expenditure policy due
to the severity and length of fiscal crises. According to FitzGerald, Mexican deficits were
financed through increased savings crowding out consumption but not private investment. Using
official IMF data this paper attempts to verify the FitzGerald thesis. By and large our results
suggest the Mexican economy is best depicted along Keynesian lines and not FitzGerald's
Kaleckian interpretation. This conclusion is further substantiated by the prolonged nature of the
country's current economic crisis associated with record high central government deficits and
subdued levels of private sector investment. If his thesis were valid for an earlier time (1951-65),
many of these relationships disappeared between 1965 and 1981.
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Article
Description
World Development, March 1987.
Refereed Journal Article
Refereed Journal Article
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Citation
Looney, R.E. and Fredericksen, P.C., "Fiscal Policy in Mexico: The FitzGerald Thesis Reexamined,” World Development, Volume 15, No. 3, March 1987.
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This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.