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Soc. Sci. 2018, 7(10), 183;

Poverty and Economic Growth in Mexico

Department of Economics, Universidad de Monterrey, 66238 San Pedro Garza García, Mexico
Received: 22 August 2018 / Revised: 25 September 2018 / Accepted: 28 September 2018 / Published: 30 September 2018
(This article belongs to the Special Issue Inequality and Poverty)
Full-Text   |   PDF [274 KB, uploaded 9 October 2018]


The relationship between poverty and economic growth has been widely discussed in the economic development literature during the past few decades. However, most of this research has been based on cross-sectional studies and very few studies have used time-series techniques to analyze this important issue. At the same time, there are also only a few studies analyzing this issue for the case of Mexico. Therefore, the objective of this paper was to analyze the relationship between poverty and economic growth in Mexico, using a cointegration analysis with structural change for the period 1960–2016. The Gregory-Hansen cointegration test confirmed the existence of a long-term equilibrium relationship between poverty reduction and economic growth, both in the short run and in the long run. Using a Vector Error Correction Model (VECM), we find that, in the long run, a 1% increase in economic growth leads to a 2.4% increase in per capita consumption (and therefore poverty reduction). This estimate is similar to those obtained in other studies for the case of Mexico and for other developing countries. Also, using the Granger causality test, it was found that there is a bidirectional causality relationship between poverty reduction and economic growth in Mexico. View Full-Text
Keywords: poverty; economic growth; economic development; Mexico poverty; economic growth; economic development; Mexico
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).

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Garza-Rodriguez, J. Poverty and Economic Growth in Mexico. Soc. Sci. 2018, 7, 183.

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