Fat cows and lean cows: Fiscal policy and structural balance in Mexico, 1990-2009

Authors

  • Juan Carlos Chávez Martín del Campo Universidad de Guanajuato
  • Ricardo Rodríguez Vargas Centro de Estudios de las Finanzas Públicas
  • Felipe de Jesús Fonseca Hernández Banco de México

DOI:

https://doi.org/10.24201/ee.v25i2.111

Keywords:

public balance, structural balance, business cycles

Abstract

This study estimates the structural budget balance for the Mexican economy adjusting for both the business cycle and the international oil price for the period 1990-2009. Consistent with earlier studies, our results suggest that fiscal policy has been characterized as procyclical during most of the period. However, we find that it has been countercyclical since late 2008, although to a lesser degree than what indicates the traditional balance. Moreover, we simulate counterfactual scenarios where it is analyzed what would have happened if a fiscal rule were applied on both the structural and the traditional budget balances over the period under study.

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Published

2010-07-01

How to Cite

Chávez Martín del Campo, J. C., Rodríguez Vargas, R., & Fonseca Hernández, F. de J. (2010). Fat cows and lean cows: Fiscal policy and structural balance in Mexico, 1990-2009. Estudios Económicos De El Colegio De México, 25(2), 309–336. https://doi.org/10.24201/ee.v25i2.111

Issue

50-vol. 25, no. 2, july-december, 2010

Section

Articles