Financialization and monetary policy dominance in Mexico during the pandemic
DOI:
https://doi.org/10.7203/IREP.5.2.28069
Abstract
The article analyzes the effects of financing on economic policy in Mexico. The financing and financial liberalization process brought with it a series of structural modifications in implementing economic policy. Thus we entered a moment of domination of monetary policy, where the role of fiscal policy has been relegated and central banks have been entrusted with conducting state intervention in the economy. For its part, monetary policy in this context has two main characteristics, the inflation targeting strategy and the prioritization of the objective of price level stability. In economies such as Mexico, the modification in economic policy strategies has been echoed with the particularity that the exchange rate has become an implicit policy objective. This is explained by the strong dependence of the Mexican economy on the outside world and the possible consequences that a currency depreciation crisis caused by a massive outflow of capital could have on the economy. This also limits the Bank of Mexico's ability to act, having to consider international events to define its actions. The reaction of the Mexican authorities during the pandemic clearly showed the operation of this scheme of subordinate domination of monetary policy, which was highly ineffective as it was unable to impact bank financing through liquidity facilities, which resulted in. the deepest drop in economic activity since the Great Depression.
Downloads
References
Adrian, T., & Liang, N. (2016). Monetary Policy, Financial Conditions, and Financial Stability (Núm. 690). Federal Reserve Bank of New York. Recuperado de Federal Reserve Bank of New York website: http://www.ssrn.com/abstract=2495074
Arestis, P., and Sawyer, M. (2003). Reinventing fiscal policy. Journal of Post Keynesian Economics, 26(1), 3–25. https://doi.org/10.1080/01603477.2003.11051388
Arestis, P. and Sawyer, M. (2010). The return of fiscal policy. Journal of Post Keynesian Economics, 32(3), 327–346. https://doi.org/10.2753/PKE0160-3477320301
Banco de México. (2016). Informe Trimestral Enero-Marzo 2016. Ciudad de México.
Banco de México. (2020a). Medidas adicionales para promover un comportamiento ordenado de los mercados financieros, fortalecer los canales de otorgamiento de crédito y proveer liquidez para el sano desarrollo del sistema financiero.
Banco de México. (2020b). Medidas para proveer liquidez en moneda nacional y extranjera y para mejorar el funcionamiento de los mercados nacionales.
Banco de México. (2021). Uso de las medidas para promover un comportamiento ordenado de los mercados financieros, fortalecer los canales de otorgamiento de crédito y proveer liquidez para el sano desarrollo del sistema financiero. Ciudad de México.
Banco de México. (2023). Exportaciones de mercancías por países [Data set]. https://www.banxico.org.mx/SieInternet/: Sistema de Información Económica.
Bernanke, B. S. (2020). The New Tools of Monetary Policy. American Economic Association Presidential Address, Washington, D.C.
Capraro, S. and Panico, C. (2021). Monetary policy in liberalized financial markets: The Mexican case. Review of Keynesian Economics, 9(1), 109–138. https://doi.org/10.4337/roke.2021.01.06
CEPAL. (2020). Panorama Fiscal de América Latina y el Caribe 2020. CEPAL.
Correa, E. (2012). Fiscal Policies and the World Financial Crisis: Understanding the Experience of Three Major Latin American Countries. International Journal of Political Economy, 41(2), 82–97. https://doi.org/10.2753/IJP0891-1916410205
Correa, E., Vidal, G. and Marshall, W. (2012). Financialization in Mexico: Trajectory and limits. Journal of Post Keynesian Economics, 35(2), 255–275. https://doi.org/10.2753/PKE0160-3477350205
Duménil, G. and Lévy, D. (2011). The crisis of neoliberalism. Cambridge, Mass: Harvard University Press.
Esquivel, G. (2020). Los impactos económicos de la pandemia en México. EconomíaUNAM, 17(51), 28–44.
Foster, J. B. (2010). La financiarización de la acumulación. Monthly Review, 62(5).
Furman, J. (2016, octubre 5). The New View of Fiscal Policy and Its Appliaction. Presentado en Global Implications of Europe’s Redesign, New York. New York.
Galindo, L. M. and Ros, J. (2006). Banco de México: Política monetaria de metas de inflación. EconomíaUNAM, 3(9), 82–88.
Goodfriend, M. (2007). How the World Achieved Consensus on Monetary Policy. The Journal of Economic Perspectives, 21(4), 47–68.
Guillén, A. (2021). El régimen de acumulación en México. Caracterización, tendencias y propuestas para su transformación (Núm. 190). Ciudad de México: Comisión Económica para América Latina y el Caribe (CEPAL).
Heath, J. and Acosta Margain, J. (2019). Reflexiones y perspectivas a 25 años de la autonomía del Banco de México. Investigación Económica, 78(310), 11. https://doi.org/10.22201/fe.01851667p.2019.310.71545
Jacobs, L. and King, D. (2021). Fed Power: How Finance Wins (2a ed.). Oxford University Press. https://doi.org/10.1093/oso/9780197573129.001.0001
Karwowski, E. (2019). Towards (de-)financialisation: The role of the state. Cambridge Journal of Economics, 43(4), 1001–1027. https://doi.org/10.1093/cje/bez023
Keynes, J. M. (2003). Teoría general de la ocupación, el interés y el dinero. Fondo de Cultura Económica.
Krippner, G. R. (2011). Capitalizing on crisis: The political origins of the rise of finance. Cambridge, Mass: Harvard University Press.
Martínez, L., Sánchez, O. and Werner, A. (2001). Consideraciones sobre la Conducción de la Política Monetaria y el Mecanismo de Transmisión en México (Núm. 2001–02). Dirección General de Investigación Económica. Banco de México.
Marshall, W. (2018). Deflación y criptomonedas. Ola Financiera, 11(30). https://doi.org/10.22201/fe.18701442e.2018.30.65515
Panico, C. (2020). La coordinación de las políticas económicas en los tiempos del Coronavirus. EconomíaUNAM, 17(51), 214–226.
Panico, C. and Moreno-Brid, J. C. (2019). El Banco de México y la política monetaria. En L. Ludlow and M. E. Romero Sotelo (Eds.), El Banco de México a través de sus constructores: 1917-2017 (pp. 517–560). Ciudad de México: Universidad Nacional Autónoma de México, Facultad de Economía.
Provencio, E. (2020). Política económica y Covid-19 en México en 2020. Economía UNAM, 17(51), 263–281.
Rochon, L.-P. and Setterfield, M. (2007). Interest rates, income distribution, and monetary policy dominance: Post Keynesians and the “fair rate” of interest. Journal of Post Keynesian Economics, 30(1), 13–42. https://doi.org/10.2753/PKE0160-3477300101
Rochon, L.-P. and Setterfield, M. (2008). The Political Economy of Interest-Rate Setting, Inflation, and Income Distribution. International Journal of Political Economy, 37(2), 5–25. https://doi.org/10.2753/IJP0891-1916370201
Rochon, L.-P. and Vallet, G. (2019). Economía del Ave María: El modelo teórico detrás de las políticas monetarias no convencionales. Ola Financiera, 12(34). https://doi.org/10.22201/fe.18701442e.2019.34.71955
Ruesga, S. (2012). La financiarización de las Relaciones Laborales. Cuadernos de Relaciones Laborales, 30(2), 409–29. https://doi.org/10.5209/rev_CRLA.2012.v30.n2.40207.
Sánchez Vargas, A. and López-Herrera, F. (2020). Tasa de política monetaria en México ante los efectos de Covid-19. Revista Mexicana de Economía y Finanzas, 15(3), 295–311. https://doi.org/10.21919/remef.v15i3.514
Seccareccia, M. (2020). ¿A donde va la política monetaria desde la crisis financiera global y qué debe hacerse? Ola Financiera, 13(35). https://doi.org/10.22201/fe.18701442e.2020.35.75507
Smith, A. (1994). La riqueza de las naciones. Madrid: Alianza.
Stockhammer, E. (2012) “Financialization, Income Distribution and the Crisis.” Investigacion Economica LXXI(279), 39–70.
Vidal, G. (2022). Las propuestas de políticas económicas alternativas en América Latina: El caso de México. International Review of Economic Policy-Revista Internacional de Política Económica, 3(2), 88. https://doi.org/10.7203/IREP.3.2.23662
Velthuis, O. and Erica Coslor (2012) The Financialization of Art. The Oxford Handbook of the Sociology of Finance, editado por Karen Knorr Cretina and Alex Preda. Oxford: Oxford University Press.. https://doi.org/10.1093/oxfordhb/9780199590162.013.0025.
Walter, T. and Wansleben, L. (2021). How central bankers learned to love financialization: The Fed, the Bank, and the enlisting of unfettered markets in the conduct of monetary policy. Socio-Economic Review, 18(3), 625–653. https://doi.org/10.1093/ser/mwz011
Wansleben, L. (2022). The rise of central banks: State power in financial capitalism. Cambridge, Massachusetts: Harvard University Press.
Wray, L. (2008) “The Commodities Market Bubble: Money Manager Capitalism and the Financialization of Commodities.” Public Policy Brief. The Levy Economics Institute of Bard College.
Yellen, J. L. (2016). Opening Remarks: The Federal Reserve’s Monetary Policy Toolkit: Past, Present and Future. Designing Resilient Monetary Policy Frameworks for the Future.
Downloads
Published
How to Cite
-
Abstract340
-
PDF (Español)167
Issue
Section
License
Copyright is the right exercised by the creator over his/her literary and artistic work. The owner of the copyright is, as a rule, the person who creates the work, which is to say the author. In Copyright Law, the author is considered to be “the natural person who creates a literary, artistic or scientific piece of work”. Although in principle it is only natural or physical persons who may be considered to be authors, the law foresaw certain cases in which legal persons could also benefit from these rights.
Authorship is irrevocable; it may not be transmitted either inter vivos or in the form of a testamentary trust; it does not disappear with the passage of time nor is it public domain; it is not subject to the statute of limitations.
Copyright Law has a dual nature; it covers moral rights (paternity, integrity, dissemination…), and property rights (reproduction, distribution, public communication, transformation):
Moral rights (article 14 of the Spanish Copyright Law). These refer to acknowledgement of authorship. They are irrevocable and inalienable and correspond to the right to:
- Decide whether his/her work is to be disseminated and how.
- Acknowledge authorship of the work.
- Demand respect for the integrity of the work.
- Modify the work while being respectful of the rights acquired.
- Withdraw the work from sale, without prejudice to compensation for damages to the owners of the right of use.
- Access the single,unique copy of the work that is held by a third party
Property rights (articles 18 to 25 of the Spanish Copyright Law). They refer to the four types of right of use. They allow the owner of the work to obtain financial compensation for the third-party use of his/her work:
- Reproduction: obtaining of copies of all or part of the work.
- Distribution: the public availability of the work through its sale, rental, loan or by any other means.
- Public Communication: action through which a group of people may have access to the work.
- Transformation: the translation, adaptation and any other modification of the work, leading, or not, to new work derived from it.
Make a Submission
Language
Information
Keywords
