Discussion Paper

No. 2019-21 | March 06, 2019
Public investment and economic activity in Mexico, 1925–1981


Mexican economic historiography recognizes the key role that public investment played in the country’s economic performance from the post-revolutionary period until the beginning of the economic liberalization that began in the mid-1980s. However, there is no concrete empirical evidence that this was the case. In this study, the authors construct a historical database of public investment—both total and broken down into its main components—for the period from 1925 to 1981, in order to measure the impact it had on economic activity. Given the possible presence of crowding-out effects between public investment and private investment, in their analysis the authors control for the latter. The results suggest that public investment had a significant impact on output one which varies depending on the category of public investment considered.

JEL Classification:

N16, H54, C32


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Cite As

Felipe Fonseca, Manuel Gómez-Zaldívar, and Daniel Ventosa-Santaulària (2019). Public investment and economic activity in Mexico, 1925–1981. Economics Discussion Papers, No 2019-21, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2019-21

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