ABSTRACT
During 1982–1988, Mexico transferred over 60 billion dollars abroad, equivalent to 7 percent of GDP. This is an analysis of three interrelated problems: the transfer problem, the impact on accumulation, and the welfare effects. The transfer effort has also shown that a noninterest fiscal outlay of only 20 percent of GDP is insufficient to generate profits to support the Mexican full capacity investment rate, which averages around 25 percent of GDP. Adapting Mexico’s economy, with its chronic fiscal deficits, to the production of large fiscal surpluses was a daunting task. The external surplus equals the domestic surplus, which is the sum of the surplus of the government’s primary budget and net private savings. To summarize, the budgetary problem has been handled mainly through three mechanisms: expenditure cuts, seigniorage, and increasing domestic debt. Only the power relations involved in the first problem, the budgetary decision, are emphasized.
