This paper examines the business cycle co‐movement in Mexican states over the period 2000–2014 by estimating an extended gravitational panel data model. Two different de‐trending filters are used to check the robustness of our results. The estimates suggest that the co‐movement increases as the size of the states’ economies does so as well as with the productive structure similarities and the relative level of development; however, the co‐movement decreases at a diminishing rate with geographical distance. There is also evidence of time‐dependent effects. In addition, the existence of moderate co‐movements among the states’ cycles suggests that common economic policies may not be suitable for all states, which implies there is a need for specific countercyclical policies to mitigate idiosyncratic shocks.

El objetivo de este artículo es documentar las características de las expansiones y recesiones para 17 estados de México en el periodo 1993-2006, para lo que se utiliza un enfoque de ciclos económicos clásicos. Utilizamos el índice de producción manufacturera para cada estado, como indicador del ciclo económico, debido a que es la única medida de producción mensual disponible. De acuerdo a este enfoque, analizamos asimetrías en media, volatilidad y duración, así como la sincronización de los regímenes de los ciclos económicos (expansiones y recesiones) para cada caso. Nuestros resultados indican que las recesiones son menos persistentes y más volátiles (en general) que las expansiones en la mayoría de los estados mexicanos; la evidencia de asimetrías en la media, sin embargo, es poco clara. A su vez, parece haber fuertes vínculos entre los regímenes de los ciclos económicos de los estados del norte y centro del país y entre estados con patrones similares de industrialización, aunque es difícil afirmar que existe un ciclo económico nacional.

This article empirically analyses real per capita GDP growth for six Latin American countries (Argentina, Brazil, Chile, Columbia, Mexico, Venezuela) in terms of real exchange rate depreciations, inflation and US interest rates, focussing on the role of the real exchange rate. We find evidence of nonlinearity in this relationship, which we capture through a smooth transition regression model. With the exception of Mexico, nonlinearity in economic growth is associated with changes in the real exchange rate, with depreciations leading to different relationships compared with appreciations. Regimes for Mexico are associated with the past growth rates, with effectively symmetric effects of real exchange rate changes. Although our results are in accord with other recent literature in that depreciations may have negative effects for growth, the asymmetries we uncover indicate that these effects depend on the conditioning state.

This paper investigates the effects of a battery of variables on total and sector output drops in the Mexican states during the Great Recession by estimating spatial and cross-section regression models. Our main results can be summarized as follows. First, there is evidence of spatial autocorrelation only in the case of total production and it seems to be negative, which does not support the hypothesis of interstate transmission of the recession. Second, total and sector production falls can be explained by the specialization in the production of tradable (mainly durable) goods. Third, exposure to external shocks plays an important role in the cases of industrial and services production, but not in total output. Fourth, there seems to be that federal fiscal policy has actually been pro-cyclical while state fiscal policies have contributed to mitigate the recession.