ABSTRACT
In the last six decades, the Mexican economy has followed a bumpy road in its, yet-to-be fulfilled, quest for development. Its evolution is marked by drastic changes in the role of the state and of the market in the economy, as well as by sharp contrasts in its performance in terms of output growth, inflation and fiscal accounts, with three distinct phases. The first one, from the mid-1950s to the early 1970s, is known as the era of “stabilizing development”. It was characterized by low inflation and high rates of economic expansion driven by a strategy of state-led industrialization and import substitution. Its dynamism, however, began to lose steam in the mid-1970s as the economy faced increasing difficulties in the substitution of imports of capital goods. In addition, the end of the Bretton Woods monetary system in 1973, on top of the first OPEC shock, triggered a balance-of-payments crisis in Mexico in 1976.
