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RV Arriaga
AH Leal

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RV Arriaga
AH Leal

Issues in Business Management and Economics
Vol.6 (1), pp. 14-30 January, 2018
ISSN 2350-157X
Available online at
Article ID/BM/18/001/17 pages
Author(s) retain the copyright of this article. Author(s) agree that this article remain permanently open access under the terms of the Creative Commons Attribution License 4.0 International License.

Original Research Article

Export-led growth and inflation targeting: Foreign and internal restriction of growth in Mexico

Roberto Valencia Arriaga1* and Angélica Hernández Leal2

1Universidad Nacional Autónoma de México, Facultad de Economía,Mexico
2Universidad Autónoma del Estado de México,

*Corresponding Author Email: rova_35(at); angiehlmx(at)

Tel.+52 155 1935 6485; +52 155 5169 4300

date Received: January 14, 2017     date Accepted: January 29, 2018     date Published: January 31, 2018


The aim of this article is to demonstrate that in Mexico, the growth strategy that is based on the export-led growth hypothesis and the policy to control inflation through the well-known inflation-targeting regime are incompatible. In fact, both become the external and internal restriction of growth, respectively. From the construction of a simple model of four equations inspired by Kalecki’s ideas, we discuss the effectiveness of these two strategies in the Mexican economy, while also using a graphical analysis based on official statistics. Our key findings show that this incompatibility arises because an increase in exports requires a competitive exchange rate, and the import of inputs- which represent over 70% of the raw material used in the production of export goods- has inflationary effects. We also point out that the key to solving this dilemma is in the real wage, which until now has remained constrained, contributing to the internal restriction of growth.

JEL Clasification: F43, F31, E52

Key words: Economy growth in open economies, exchange rate,. monetary policy

Arriaga and Leal