Publication: Globalization, De-Industrialization and Mexican Exceptionalism 1750-1879
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2006-06
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Abstract
Like the rest of the poor periphery, Mexico had to deal with de-industrialization forces between
1750 and 1913, those critical 150 years when the economic gap between the industrial core and
the primary-product-producing periphery widened to such huge dimensions. Yet, from
independence to mid-century Mexico did better on this score than did most countries around the
periphery. This paper explores the sources of Mexican exceptionalism with de-industrialization. It
decomposes those sources into those attributable to productivity events in the core and to
globalization forces connecting core to periphery, and to those attributable to domestic forces
specific to Mexico. It uses a neo-Ricardian model (with non-tradable foodstuffs) to implement the
decomposition, and advocates a price dual approach, and develops a new price and wage data
base 1750-1878. There were three forces at work that account for Mexican exceptionalism: first,
the terms of trade and Dutch disease effects were much weaker; second, Mexico maintained
secular wage competitiveness with the core; and third, Mexico had the autonomy to devise
effective ways to foster industry. The first appears to have been the most important.