Mexico and the Economic Development Financing Trap

This article defines the economic development financing trap in Mexico, based on an economic policy that has positioned public spending based on a financial cost above a full employment policy. For the last three decades, starting with the NAFTA and the subsequent USMCA, the interests of the Fed have prevailed, prioritizing a close relationship with Mexico’s creditors. By maintaining macroeconomic stability without an economic policy with sovereign management, public spending has been channeled to financial interests, stopping the pursuit of a full employment policy. During the period analyzed, the public financial cost far exceeds social spending for exerting restrictive policies that imply increasing social transfers without the possibility of activating the investments for economic development.