Economic Policymaking with Little Information and Few Instruments: The Process of Macro-Control in Mexico.

by John Koehler

Purchase Print Copy

 FormatList Price Price
Add to Cart Paperback71 pages $25.00 $20.00 20% Web Discount

Analysis of the structure of the Mexican economy indicates that information and policy instruments available to the government, although seemingly crude and inaccurate, are sufficient to achieve a reasonable degree of macroeconomic stability. Since the early 1950s, Mexico has experienced growth with respectable stability; the stability exists because public expenditure and private autonomous expenditure have moved in offsetting ways. The burden of adjustment, however, has been carried by private investment rather than by public expenditure. The level of private investment has been controlled by manipulation of the level of reserves that private financial institutions are required to deposit in the central bank, Banco de Mexico, and this manipulation is based on the monitoring of two variables: the rate of growth of the money supply and the rate of change of foreign exchange reserves. A model is developed to measure the power of the reserve ratio to affect the level of investment and GNP. 71 pp.

This report is part of the RAND Corporation Paper series. The paper was a product of the RAND Corporation from 1948 to 2003 that captured speeches, memorials, and derivative research, usually prepared on authors' own time and meant to be the scholarly or scientific contribution of individual authors to their professional fields. Papers were less formal than reports and did not require rigorous peer review.

Our mission to help improve policy and decisionmaking through research and analysis is enabled through our core values of quality and objectivity and our unwavering commitment to the highest level of integrity and ethical behavior. To help ensure our research and analysis are rigorous, objective, and nonpartisan, we subject our research publications to a robust and exacting quality-assurance process; avoid both the appearance and reality of financial and other conflicts of interest through staff training, project screening, and a policy of mandatory disclosure; and pursue transparency in our research engagements through our commitment to the open publication of our research findings and recommendations, disclosure of the source of funding of published research, and policies to ensure intellectual independence. For more information, visit www.rand.org/about/principles.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.