Structural Origins of Mexican Inflation: 1951-1980

Abstract

After a period of over 15 years of relative price stability, the general price level began to rise rapidly in Mexico during the last quarter of 1972, reaching approximately 70 per cent by 1982. The paper addresses itself to three main questions: (i) What role did accelerated government expenditures play in increasing inflationary pressures? (2) To what extent was the recent inflation Imported rather than domestically induced? (3) Did the underlying mechanism of inflation change during this period so that the inflation experience in the mid- to late 1970s became fundamentally different from that experienced in prior periods?