Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282260 
Year of Publication: 
2019
Citation: 
[Journal:] Atlantic Review of Economics (ARoEc) [ISSN:] 2174-3835 [Volume:] 3 [Issue:] 3 [Year:] 2019 [Pages:] 1-27
Publisher: 
Colegio de Economistas de A Coruña, A Coruña
Abstract: 
In this paper, we study the import of intermediate goods (MIG) for México, these imports represent 80% of total imports, and they are closely related to exports and production for domestic demand. We first try to estimate a VEC model using MIG, exports, domestic demand, and real exchange rates but we find impossible to estimate directly due to problems of endogeneity between MIG, exports and domestic demand. We construct instrumental variables for exports and domestic demand. But then we face multicollinearity problems between the instrumental variables. Therefore, we estimate two separate VECs one for MIG for exports and another for MIG for domestic demand. We find minimal possibilities to increase local content for exports, but we find hope in the production for domestic demand.
Subjects: 
VEC
Imports
Intermediate goods
Mexico
JEL: 
F02
F14
F15
Document Type: 
Article

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