ABSTRACT
Mexico’s performance in the 1990s will depend to a considerable extent on forces that lie within the Mexican economy itself, such as its capacity to save and invest in ways that contribute to its continued growth. The most obvious factor in Mexico’s external environment is its neighbor to the north, whose performance and policies continuously generate opportunities and threats for Mexico. Movements in United States (US) output, prices, interest rates, and exchange rates, for instance, can have an enormous impact on Mexico’s economy in the short run. US foreign economic policies have always appeared enigmatic and full of seeming reversals and contradictions to foreign observers. One factor pushing in that direction is the increasing importance of exports in the economic well-being of the US; the relatively buoyant performance of the US economy in 1987 and 1988 is widely attributed to the unexpectedly strong showing of its export sector.
