The objective of this thesis is to analyze three key aspects of the long-term relationship between energy policy and overall economic policy in Mexico: (1) energy- industrialization; (2) energy-labour force; and (3) energy-foreign debt. The importance of the energy sectors in the general economy is evaluated from a historical perspective. Some of the most representative energy studies, both theoretical and empirical are reviewed. Also, the structure and specification of some general equilibrium (GE) models constructed for Mexico are compared within a SAM-type conceptual framework. The SAM approach is then used to formulate the one-period version of the model. An optimizing intertemporal GE model is constructed and implemented to analyze the interdependence between the decisions of the various economic agents, and to explore the sensitivity of optimal policies with respect to such key parameters as elasticities of substitution and world oil prices. The starting point of the model is the work by Blitzer and Eckaus (1986a). However, given the different nature of the present study, five types of improvements have been introduced: (i) the objective function and the terminal constraints are formulated in a way that leads to more attractive price structures; (ii) the model contains truly price-sensitive endogenous choices; (iii) there is a greater degree of disaggregation of the accounts; (iv) the data base is more updated; and (v) a much improved software is employed for solving the model. The following are some of the main conclusions derived from the various solutions of the model: - Both the real and dual sides of the model capture a structural adjustment process towards expansion of nonoil tradeable producing sectors. Manufacturing exports replace oil and gas revenues and external capital inflows as the main source of foreign currency. - Foreign exchange is the most serious constraint of the system, so that foreign debt reduction is considered as the most profitable way of allocating current income. - This calls for a portfolio switching effect among the assets that constitute Mexico's wealth: foreign debt reduction affects investment in real capital assets, which, in turn, means that the economy grows below the labour force growth. Moreover, in the majority of the experiments, oil and gas extraction levels are constrained by the ceilings imposed by the government. - Skilled labour force shortages also restrict the economy significantly. Yet, the economy is not constrained in its ability to absorb oil revenues.
| Identifer | oai:union.ndltd.org:bl.uk/oai:ethos.bl.uk:277241 |
| Date | January 1989 |
| Creators | Barba-Viniegra, Ricardo Manuel |
| Publisher | University of Warwick |
| Source Sets | Ethos UK |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
| Source | http://wrap.warwick.ac.uk/107461/ |
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