01830cas a2200253 a 4500 AALejournalIMF007657 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451857726 1018-5941 BD-DhAAL BD-DhAAL Kalter, Eliot. The 1994 Mexican Economic Crisis : The Role of Government Expenditure and Relative Prices / Eliot Kalter, Armando Ribas. Washington, D.C. : International Monetary Fund, 1999. 1 online resource (23 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper discusses the role of a country's fiscal stance in weakening the financial underpinnings of an open economy with a quasi-fixed nominal exchange rate, even where the overall fiscal deficit remains unchanged, or even narrows. The paper cites the role of expanding government operations in reducing the relative price of traded goods. A marked increase in government expenditure and taxation is associated with increased production costs, excess demand for nontraded goods, and a deterioration in the financial health of the traded goods sector. The paper demonstrates that, in contrast to the current economic situation in Mexico, the period leading to the 1994 crisis closely parallels these stylized facts. Mode of access: Internet Ribas, Armando. IMF Working Papers; Working Paper ; No. 1999/160 Full text available on IMF http://elibrary.imf.org/view/journals/001/1999/160/001.1999.issue-160-en.xml IMF e-Library