Prepared by Andreas Bauer, Juan Pablo Cordoba, and Reva Krieger.
For example, R. Barro, 1991, “Economic Growth in a Cross Section of Countries,” Quarterly Journal of Economics; J. Sachs and A. Warner, 1995, “Economic Reform and the Process of Global Integration,” Brookings Papers on Economic Activity.
In addition to the income law and the expenditure decree, the budget documentation that is submitted to congress includes a document that lays out the general macroeconomic strategy for the next year (Criterios Generales de Politica Economica).
For 2001, the government agreed during the congressional budget debate to an increase of the overall deficit target from 0.5 percent of GDP to 0.65 percent of GDP. In the debate over the 2002 budget the overall deficit ceiling remained at 0.65 percent of GDP, as proposed by the government.
The federal government and PEMEX however, sell all their excess foreign currency holdings to the central bank and the BOM sterilizes these purchases. This explains the accumulation of international reserves. Until May 2001, the central bank also accumulated reserves by selling foreign currency put–options.
Nonetheless, the future distribution of profits could only take place after the capital to GDP ratio had been fully reestablished.