Mexico’s Economy, 2009 Harvard Case Solution & Analysis

Mexico had a history of frequent financial crises, with high inflation resulting in current account deficits with volatile capital inflows, culminating in substantial devaluations. Worries continued that this pattern might repeat itself in the future. Governments created barriers to entry for imports and foreign investment and put in place price controls that shielded present Mexican businesses.

After 1980, the market was opened by a series of investment and trade reforms. Nevertheless, many expressed the view that Mexico's reform movement delayed under President Fox (2000-2006) and that wide-ranging government involvement sustained to stifle struggle. Exhibits present macroeconomic data as well as World Bank Investment Climate indicator. A string of challenges now confronted Mexico, including the U.S. fiscal crisis and downturn, rivalry with China, proper monetary policy, opening oil production to foreign companies and a rise in corruption and violent crime.

PUBLICATION DATE: December 09, 2008 PRODUCT #: 908M84-HCB-ENG

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