Determinants of the Economic Growth in Mexico : An Exogenous Growth Model

• Main Author: Castro, José Luis
• Format: Others
• Language: English
• Published: Internationella Handelshögskolan, Högskolan i Jönköping, IHH, Nationalekonomi 2008
• Subjects: Exogenous Growth; Augmented Solow Model; Human Capital; Physical Capital; Effective Labour; Mexico; Economics; Nationalekonomi; Econometrics; Ekonometri
• Online Access: http://urn.kb.se/resolve?urn=urn:nbn:se:hj:diva-7369

    This bachelor thesis aims to uncover the determinants of the economic growth in Mexico with an exogenous growth model. The study is based in an Augmented Solow Model em-ployed by Mankiw, Romer and Weil in "A contribution to the Empirics of the Economic Growth" (1992). The model uses annual data of Mexico from 1960-2007 and the regressions and tests are developed in the econometric package Stata 10 for eight different periods. The thesis not only uses the Effective Labour and Physical Capital as Inputs in the production Function, but also employs the variable of Human Capital as an economic determinant of growth in the production function. The results of the model correspond with the actual scenario in Mexico; more weight to the Effective Labour (76.34%) rather than to Human Capital (2.12%) or Physical Capital (21.54%) as determinants of growth.