Examines how Mexico found itself in the debt crisis that exploded in 1982 and how the de la Madrid administration (1982-1988) followed by the Salinas government (1988) develops strategies with which to address the macroeconomic imbalances. Describes the economic and political consequences of this policy and the tradeoffs involved. The primary lessons include: 1) an understanding of internal and external causes of unsustainable debt of Mexico, 2) the difficulty of adapting and restrict the … Read more »

Examines how Mexico found itself in the debt crisis that exploded in 1982 and how the de la Madrid administration (1982-1988) followed by the Salinas government (1988) develops strategies with which to address the macroeconomic imbalances. Describes the economic and political consequences of this policy and the tradeoffs involved. The primary lessons include: 1) an understanding of internal and external causes of unsustainable debt of Mexico, 2) the difficulty of adaptation and constraints for decision-makers in the implementation of measures, and 3) the conditions under which non-inflationary growth and repayment of debt are sustainable.
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Helen Shapiro
Source: Harvard Business School
27 pages.
Release Date: 03 April 1990. Prod #: 390174-PDF-ENG
Mexico: Escape from the debt crisis? HBR case solution

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