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This paper uses a simple framework based on the government budget constraint to analyze the consistency of macroeconomic policies undertaken in Mexico during the period 1978 to mid-1991. It was found that the interaction between the actual implementation of economic policies and economic agents’ perceptions about the sustain-ability of those policies can account, to a large extent, for the behavior of key macroeconomic variables during the period under study. The paper also highlights the costs of adjustment involved in the most recent Mexican stabilization program arising from concerns about the sustainability of the announced policies.

Banks and Banking --- Exports and Imports --- Inflation --- Macroeconomics --- Public Finance --- Foreign Exchange --- Debt --- Debt Management --- Sovereign Debt --- Price Level --- Deflation --- Interest Rates: Determination, Term Structure, and Effects --- International Investment --- Long-term Capital Movements --- Fiscal Policy --- Public finance & taxation --- Finance --- International economics --- Currency --- Foreign exchange --- Government debt management --- Real interest rates --- Capital outflows --- Fiscal stance --- Public financial management (PFM) --- Prices --- Financial services --- Balance of payments --- Exchange rates --- Debts, Public --- Interest rates --- Capital movements --- Fiscal policy --- Mexico

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This paper examines the empirical relationship between long–run growth and the degree of financial development, proxied by the ratio of bank credit to the private sector as a fraction of GDP. We find that this proxy enters significantly and with a positive sign in growth regressions on a large cross–country sample, but with a negative sign using panel data for Latin America. Our findings suggest that the main channel of transmission from financial development to growth is the efficiency of investment, rather than its volume. We also present a model where the negative correlation between financial intermediation and growth results from financial liberalization in a poor regulatory environment.

Banks and Banking --- Finance: General --- Money and Monetary Policy --- Production and Operations Management --- Interest Rates: Determination, Term Structure, and Effects --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Financial Markets and the Macroeconomy --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Employment --- Unemployment --- Wages --- Intergenerational Income Distribution --- Aggregate Human Capital --- Aggregate Labor Productivity --- Finance --- Monetary economics --- Banking --- Macroeconomics --- Real interest rates --- Financial sector development --- Credit --- Monetary aggregates --- Financial services --- Financial markets --- Money --- Capital productivity --- Production --- Interest rates --- Financial services industry --- Banks and banking --- Money supply --- Russian Federation

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This study examines the effects of selected policies on economic efficiency in 81 developing countries by pooling cross-country data over various subperiods between 1961-90. An incremental output-capital ratio is the measure of economic efficiency, while the policy variables include: export orientation, size of the public sector, directed credit program through development bank lendings, financial depth, inflation rate, real interest rate, and real exchange rate distortion. The export-orientation, financial depth, and real interest rate are found to promote economic efficiency, while other policy variables are found to hinder it.

Banks and Banking --- Foreign Exchange --- Industries: Financial Services --- Exports and Imports --- Macroeconomics --- Interest Rates: Determination, Term Structure, and Effects --- Financial Institutions and Services: General --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- General Aggregative Models: General --- Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General --- Macroeconomic Analyses of Economic Development --- Trade: General --- Public Enterprises --- Public-Private Enterprises --- Finance --- Currency --- Foreign exchange --- Banking --- International economics --- Civil service & public sector --- Real interest rates --- Real exchange rates --- Multilateral development institutions --- Exchange rates --- Commercial banks --- Financial services --- Exports --- International trade --- Public sector --- Economic sectors --- Interest rates --- Development banks --- Banks and banking --- Finance, Public --- Argentina