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Caballero, Ricardo J.
Year of Publication: 
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Working Paper, Inter-American Development Bank, Research Department 420
This paper surveys Mexico`s economic weaknesses and provides related policy recommendations. Current problems include weak international financial links and external conditions, a recurrent credit crunch and financial underdevelopment problem, with particularly fragile banks, a weak fiscal situation, due to extreme vulnerability to internal and external shocks, and a latent monetary policy credibility problem. The paper`s policy recommendations include improving external financial links, reducing direct exposure to external shocks, accelerating domestic financial deepening and strengthening existing arrangements, reducing public accounts exposure to internal and external shocks, and stabilizing very high and very low frequency movements in the nominal exchange rate.
Document Type: 
Working Paper

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