Mexico | The worrying drop in investment

Summary

Investment in Mexico has been falling in recent years. This is a worrying trend. This component of aggregate demand is of fundamental importance since it determines the long-term productive capacity and, therefore, the potential growth rate of the economy.

Key points

• Key points:
• Investment increases the capital stock
• Per capita growth of an economy can only come from increases in capital or productivity
• Productivity in Mexico has been stagnant for at least two decades

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