ABSTRACT
Mexico’s economic program has one main objective: to restore sustained and balanced growth. Since 1982, the Mexican economy has undergone a dramatic transformation as economic policies have reestablished the fundamental macroeconomic equilibrium. This chapter discusses the effects of government policy on macroeconomic stability, placing special emphasis on the achievements. It examines the conditions for microeconomic efficiency and international competitiveness. The chapter explains what “rebalancing government direction and market guidance” implies for the external sector. The dynamic inconsistency of the policies adopted in the 1970s and early 1980s made the economy most vulnerable to external shocks, especially in the oil and foreign capital markets. Modernization of the productive plant is necessary for the Mexican economy to compete effectively in international markets. Internal market guidance for microeconomic efficiency requires adequate external market access to exports, and rebalancing government direction for macroeconomic stability requires a permanent reduction of net transfers abroad.
