Abstract

ZAVALETA VAZQUEZ, Osmar Hazael  and  MARTINEZ SILVA, Irving David. ECONOMIC GROWTH AND DEVELOPMENT OF CAPITAL MARKETS IN MEXICO. Innovar [online]. 2015, vol.25, n.spe, pp.131-149. ISSN 0121-5051.  https://doi.org/10.15446/innovar.v25n1spe.53370.

Several authors claim that the development of the financial system, in general, and the financial markets, in particular, depend on the country's economic development, since the need for financial services and the financing of production projects will increase as a consequence of the growth of the real economy. In contrast, there is another idea stating that the growth of real economy depends, partly, on the development of the financial system. The purpose of this paper is to estimate a structural econometric model to analyze the influence of capital market performance on the growth of Mexican economy, taking into account the main factors that determine the growth of real economy. The period studied is between April-2000 and August-2010. Results show that the performance of capital markets in Mexico has a weight on the growth of domestic economy that is similar to that of the reduction of unemployment rate, and it is practically three times greater than the one caused by remittances on the real economic growth. Additionally, its impact is considerably bigger than the one of investment in science and technology and that of the trade balance.

Keywords : Economic growth; finance system; capital market; Granger causality; Mexico.

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