The Economic Impact of the Mexican Peso Crisis Research Paper by Gizzman

The Economic Impact of the Mexican Peso Crisis
An examination of the impact of the Mexican peso crisis on the world at large.
# 112152 | 3,164 words | 6 sources | MLA | 2009 | US

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This paper discusses the economic impact of the Mexican peso crisis that occurred in 1994. It describes the events that led up to the devaluation of the peso and the impact of the development of the crisis. The paper then discusses the rescue package to bailout the failing economy and describes the impact that the crisis had on the world at large.

Table of Contents:
Literature Review and Theory

From the Paper:

"The pesos continued downgrading raised questions about Mexico's ability to service the short-term foreign currency denominated debt. The Washington consensus feared that Mexico would declare foreign debt moratorium or re-impose trade and exchange restrictions after NAFTA had been signed, which may have spread contagion to other member countries. Thus, in February 1995, they provided financial rescue package to Mexico for debt restructuring. The financial rescue package totaled $48.8 billion. The IMF stand-by credit of $17.8 billion was the largest ever both in terms of absolute amount and in relation to Mexico's holding in the Fund. The financial rescue package was provided conditional upon a stringent adjustment program designed to collaborate with the International Monetary Fund. The rescue loans allowed Mexico to swap the short-term financial obligations to mid to long-term. Due to the financial rescue package, Mexico's external total debt rose from 38.3 % of GDP in 1994 to 69.1% in 1995. Even though IMF has been criticized for its improper policies and procedures and ignorant handling of bailouts, the Mexican government was influenced in terms world organizations due to the peso crisis of the 90s."

Sample of Sources Used:

  • Dornbusch, Rudiger, and Werner, Alejandro. "Mexico: Stabilization, Reform, and No Growth." Brookings Papers on Economic Activity, Spring, 1994, 1994:1.
  • Eaton, Leslie. "Mexico Devalues the Peso, Dealing a Blow to Stocks." New York Times, December, 1994, 21 December, D1.
  • Lustig, Nora. Mexico: Remaking of an Economy. 2nd Edition. Washington, DC: Brookings Institution Press, 1998.
  • Pastor, Manuel Jr. "Pesos, Policies, and Predictions." The Post-NAFTA Political Economy. Ed. Carol Wise. University Park: The Pennsylvania State University Press, 1998.
  • What's wrong with the IMF? Global Exchange/Fifty years is enough. 22 May 2001. <>.

Cite this Research Paper:

APA Format

The Economic Impact of the Mexican Peso Crisis (2009, February 13) Retrieved September 26, 2023, from

MLA Format

"The Economic Impact of the Mexican Peso Crisis" 13 February 2009. Web. 26 September. 2023. <>