1. The Mexican Economy: ¡Sí se puede! Jorge G. Gonzalez Trinity University

2. Recent Economic and Political Events Economic growth in the U.S. Economic growth in the U.S. Government gridlock Government gridlock Presidential campaigns Presidential campaigns Mexico – U.S. relationship Mexico – U.S. relationship

3. Immigration Debate Pros: Pros: Shortage of labor in U.S. & surplus in Mexico Shortage of labor in U.S. & surplus in Mexico U.S. benefits from their labor U.S. benefits from their labor Mexico benefits from remittances Mexico benefits from remittances Cons: Cons: Effects on low-skilled natives Effects on low-skilled natives Effects on local budgets Effects on local budgets

4. Vital Signs Is the link alive? Is the link alive?

5. Industrial Production Index (January 2000 = 100) Source: Banco de México and FED www.banxico.org.mx; www.federalreserve.gov

6. Vital Signs Is the link alive? Is the link alive? GDP growth GDP growth

7. Real GDP % yearly change Source: INEGI www.inegi.gob.mx

8. Vital Signs Is the link alive? Is the link alive? GDP growth GDP growth Foreign direct investment Foreign direct investment

9. Foreign Direct Investment Billions of Dollars Source: Banco de México www.banxico.org.mx

10. Debt Market Foreign Investment Billions of Dollars Source: Banco de México www.banxico.org.mx

11. Stock Market Foreign Investment Billions of Dollars Source: Banco de México www.banxico.org.mx

12. Vital Signs Is the link alive? Is the link alive? GDP growth GDP growth Foreign direct investment Foreign direct investment Super Peso and foreign sector Super Peso and foreign sector

13. Exchange Rate Pesos per U.S. Dollar Source: Banco de México www.banxico.org.mx

14. Exchange Rate Pesos per U.S. Dollar Source: Banco de México www.banxico.org.mx

15. Inflation Differential vs. Exchange Rate Inflation Exchange Rate 317 219 Source: Banco de México www.banxico.org.mx

16. Merchandise Trade Billions of Dollars Source: Banco de México www.banxico.org.mx Imports Exports

17. Family Remittances Billions of Dollars Source: Banco de México www.banxico.org.mx

18. Vital Signs Is the link alive? Is the link alive? GDP growth GDP growth Foreign direct investment Foreign direct investment Super Peso and foreign sector Super Peso and foreign sector Federal government balance Federal government balance

19. Government Balance Balance / GDP Source: SHCP www.shcp.gob.mx

20. Vital Signs Is the link alive? Is the link alive? GDP growth GDP growth Foreign direct investment Foreign direct investment Super Peso and foreign sector Super Peso and foreign sector Federal government balance Federal government balance War on inflation War on inflation

21. Inflation Source: Banco de México www.banxico.org.mx

22. Vital Signs Is the link alive? Is the link alive? GDP growth GDP growth Foreign direct Investment Foreign direct Investment Super Peso and foreign sector Super Peso and foreign sector Federal government balance Federal government balance War on Inflation War on Inflation

23. Political Environment Felipe Calderón Roberto Madrazo Andrés López Obrador

24. Political Environment Source: El Norte, April 25, 2006 www.elnorte.com

25. President Fox’s Sexenio Separation of Powers Separation of Powers Economic Stability Economic Stability Poverty Reduction Poverty Reduction Freedom of the Press Freedom of the Press No Major Economic Reforms No Major Economic Reforms

26. Fiscal System, Energy Sector, and Labor Laws Fiscal System, Energy Sector, and Labor Laws Domestic Antitrust and Competition Domestic Antitrust and Competition War on Poverty War on Poverty Rule of Law Rule of Law North American Union? North American Union? Economic Reform: ¿Sí se puede?

27. The Mexican Economy: ¡Sí se puede! www.trinity.edu/jgonzal1 jorge.gonzalez@trinity.edu