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How Important Are U.S. Capital Flows into Mexico?

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In November 1993, the U.S. Congress voted to pass the North American Free Trade Agreement (NAFTA) after months of heated debate about its likely impact on our economy. As a result of the intense focus on this issue, the public has benefited from a greater appreciation of the increased interdependence of the Mexican and U.S. economies. However, both the public debate and detailed analysis of the post-NAFTA economic environment have understated the importance of capital flows from the United States into Mexico.

In November 1993, the U.S. Congress voted to pass the North American Free Trade Agreement (NAFTA) after months of heated debate about its likely impact on our economy. As a result of the intense focus on this issue, the public has benefited from a greater appreciation of the increased interdependence of the Mexican and U.S. economies. However, both the public debate and detailed analysis of the post-NAFTA economic environment have understated the importance of capital flows from the United States into Mexico.


Suggested citation: Osterberg, William P., 1994. "How Important Are U.S. Capital Flows into Mexico?" Federal Reserve Bank of Cleveland, Economic Commentary, 12.01.1994.

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