This effect, along with Mexico’s sounder macroeconomic policies, has resulted in an increased synchronization of its business cycles with those of the United States, thus making the economy relatively more stable than in the past. Structural reforms In spite of the benefits from economic liberalization, Mexico’s long-term economic performance has been less than stellar.
When we speak about fiscal and economic policies, combining risk sharing and risk reduction means that more pooling of fiscal resources – which I believe is ultimately necessary to provide better insurance against shocks – will have to be accompanied: (i) by a new convergence process which ensures that all economies have a similar resilience to shocks; and (ii) by initiatives to restore the credibility of our fiscal rules.