Hempell and Kok Sorensen (2010) show that these supply constraints have affected credit growth, even when changes in loan demand are taken into account. Ciccarelli et al. (2010) demonstrate that credit supply constraints in the euro area contributed to the fall in GDP growth in the early part of the crisis and a similar effect can be observed in the US.
California has been a significant destination and origin for these trade flows. Both countries have clearly exploited their comparative advantages. The abundance of labor in Mexico has combined with new technologies and know-how from the United States and other advanced nations to allow the country to produce a host of products of increasing sophistication at low cost.