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Mexico: Illicit Financial Flows, Macroeconomic Imbalances, And The Underground Economy, Dev Kar
Mexico: Illicit Financial Flows, Macroeconomic Imbalances, And The Underground Economy, Dev Kar
Dev Kar
The study traces the evolution of illicit financial flows from Mexico over the 41-year period 1970-2010. While such outflows have increased throughout the four decades, the pace picked up in the post- compared with the pre-NAFTA period. Furthermore, in spite of the somewhat erratic nature of the outflows over time, there is a discernable pattern to these outflows in the years leading up to the macroeconomic crises and their aftermath. We develop a dynamic simulation model that examines the interactions between fiscal developments, monetary expansion, and the generation of inflation on the one hand and on the interactions between the …