Tuesday, July 26, 2011
The Great Stagnation and Mexico
I have a piece about Tyler Cowen's book and what it could mean for Mexico at Este País. If we accept his hypothesis that the US has no obvious, easy drivers of high growth rates for a while into the future, I think there are two competing tendencies with regard to Mexico: on the one hand, this is really bad news because a long-term decline in the lack of American consumption undercuts a significant plank of the Mexican economy. (I don't think this fact gets enough attention in Mexican discussions of the crisis and its impact.) On the other hand, the low-hanging fruit that the US grabbed is still there for the taking in Mexico, especially with regard to technological advancement and educational improvements. In any case, the logic for heavy dependence on the US economy over the next, say, 50 years seems to decrease.