Mexican Economic Crisis

Economics / April 23, 2015 / No Comments /
1994 devaluation of peso, debt crisis, causes, remedies, bailout, effects on other countries, foreign investment in emergency economics.

“The globalization of world markets has had a number of positive and negative effects, including the migration of currency fluctuations across borders (The Economist, 1996a). After the collapse of the peso in late 1994, a panic rattled other emerging markets from Brazil to Thailand, sending shocks into these and other vulnerable markets as well. This raises, according to Edwin M. Truman (1996), broad questions about the international institutional and financial environment. On December 20, 1994, the Mexican government announced the devaluation of its currency, surprising financial markets and precipitating the so-called “Mexican peso crisis.” The devaluation came after three years during which Mexico had followed an exchange rate policy of maintaining the peso within a well-defined band against the U.S….”

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