Supply, demand and economic growth in Mexico in the period 1980–2016

Abstract

Economic growth is produced by stimuli arising from supply and demand. On the supply side, growth depends on the accumulation of factors and their productivity. On the demand side, it is determined by government consumption, investment and spending and net exports. Input-output tables can be used to explain the contributions made by the growth of the components of each of the variables and to find the growth path followed by the economy. From this path it can be gauged whether the type of growth is more supply- or demand-led. This paper uses input-output tables to show that growth in Mexico has relied on more dynamic supply-side components, which is not conducive to the good performance of the economic system.