Research Paper on:
Economic Collapse of Mexico Analyzed

Unformatted Sample Text from the Research Paper:
1996). These were not pie-in-the-sky predictions made by optimistic novices; the estimates came from numerous private economics, from the Organization for Economic Cooperation and Development (OECD) and from Blue Chip  forecasts (Gould, 1996). For the first time in many years, Mexico seemed to be on a fast track for macroeconomic growth and stability (Gould, 1996). For one thing, the inflation  rate had dropped below the double-digit level, for another, the governments budget for the public sector was close to the balance point, and for yet another thing, the nation was  enjoying a growth of 22 percent per year in exports (Gould, 1996). Adding to these positive factors was the fact that Mexico had joined NAFTA and finally, the country had  recently had the first uneventful presidential election in years (Gould, 1996). All of these factors suggested that economic reforms initiated in the 1980s and early 1990s had indeed resulted in  more stability in the macroeconomy (Gould, 1996). But, in that same month, December 1994, on the 20th, the Mexican peso was seriously devalued, losing 35 percent in a  two week period of time (Gould, 1996). Still, the international fiscal community was not unduly concerned; it was perceived as a minor correction to the exchange rate of the Mexican  peso but the confidence was soon shattered as the crunch began to be felt in financial quarters outside the country (Gould, 1996). Three months later, in March 1995, the peso  had definitely collapsed losing more than half its value (Gould, 1996). What made the further collapse of the Mexican peso even more dramatic was that at the end of January  1995, the international community had arranged a bailout assistance package of about $50 billion (Gould, 1996). The assistance was intended to "shore up the liquidity problems in Mexican dollar-denominated debt,