Mexico and Canada before the financial American crisis: a comparative study

Abstract

The purpose of this research is to study the origin and recent development of the U.S. economic crisis, as well as its heterogeneous repercussions on the Mexican and Canadian output. Even though the Canadian economy is more open and closely integrated to the U.S. than the Mexican economy, Mexico suffered a much larger output loss than Canada. In order to explain this fact we analyze the impact of the U.S. crisis on different sectors of the Mexican and Canadian economy, and compare the countercyclical policies implemented by the fiscal and monetary authorities of both nations. An important conclusion is that the Mexican government’s countercyclical measures were insufficient and delayed.