A Foresight Analysis of Border Economies of the United States and Mexico

Abstract

The economic relation between the US and Mexico represent one of the biggest economic zones in the world with international trade of goods and services between these countries reaching 616 billion dollars. These economies have become more integrated and their business cycles more synchronized. There is, however, a significant asymmetry on the size of these economies; The per capita income in the US is approximately 3 times the per capita income of Mexico and our analysis suggests that the divergence of per capita incomes between these countries is likely to remain in the foreseeable future. In this chapter we develop 5 scenarios for the future economic relation between the US and Mexico. We consider that the future of the economic relation of the US and Mexico critically depends, among other things, on the evolution of total factor productivity and on the type of economic model implemented in each country.