EXTERNAL PUBLIC INDEBTEDNESS IN MEXICO: RECENT HISTORY AND FUTURE OIL BOUNDED OPTIMAL GROWTH

• Main Author: ZEDILLO PONCE DE LEON, ERNESTO
• Format: Dissertation
• Language: English
• Published: ProQuest Dissertations & Theses 01-01-1981
• Subjects: Finance
• ISBN: 9798204203808

The phenomenon of the growth of the external public debt in Mexico since 1954 is the subject matter of the dissertation. Chapter 1 provides a review of a few preliminary topics such as the history of the debt prior to 1954 and the evolution of the Mexican economy and the total inflow of foreign capital since 1954. Chapter 2 provides a detailed description of the growth of the foreign public debt during 1954-1979, paying attention to a number of debt management aspects. At this point it results clear that the external debt began to grow well over its historic trend in 1973. An analysis of the short-run direct macroeconomic impacts of the net flow of the debt from the mid-fifties to the mid-seventies, is presented in Chapter 3. Through the specification and estimation of a small econometric model, the direct impact of such variable on different components of the aggregate demand is estimated. An important result of this analysis is that the marginal effect on public investment of an additional dollar of foreign indebtedness decreased during the period of study. In Chapter 4, the causes of the growth of the debt during 1973-1977 are studied. An analytical framework that distinguishes between external and internal debt-inducing factors is presented. Its application reveals that, unlike the case of other LDC's, the growth of the debt during such period was more the result of internal than external phenomena. On the final chapter, Mexico's indebtedness outlook for the 1980's is considered. The analysis focuses on the interaction that should exist between oil exports and indebtedness. The issue is analyzed through a simple theoretical model--of the optimal control type. The empirical application of the model yields optimal trajectories of oil extraction and indebtedness for the years 1981-1990.