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Concepts and Measurements of Economic Interdependence: The Case of the United States and Mexico

María del Rosío Barajas-Escamilla

Social Studies Department, El Colegio de la Frontera Norte, Tijuana, BC 22560, Mexico

E-mail Address: rbarajas@colef.mx

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Amir Kia

Finance and Economics Department, Utah Valley University, Orem, UT 84058–5999, USA

E-mail Address: akia@uvu.edu

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Maritza Sotomayor

Finance and Economics Department, Utah Valley University, Orem, UT 84058–5999, USA

E-mail Address: maritza.sotomayor@uvu.edu

Corresponding author.

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https://doi.org/10.1515/gej-2015-0034Cited by:2 (Source: Crossref)

Abstract

We developed a theoretical model capable to analyze U.S. fiscal and monetary policy effects on Mexican exports in order to provide an alternative approach to the study of economic interdependence. The model was estimated for the sample period of 1980–2013. The existing literature evidences quantified interdependence through trade flows and ignores the role of the U.S. fiscal and monetary policies. This paper uses the concept of sensitivity, from the economic interdependence literature, to verify the long and short run relationships between the U.S. and Mexico in a context of trade integration. Our findings confirm Mexico’s sensitivity to unanticipated shocks in particular coming from the U.S. monetary policy, the exchange rate and the world oil price.

Keywords:

JEL Classification: F140, F150, C32, E52

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Concepts and Measurements of Economic Interdependence: The Case of the United States and Mexico

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