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Abstract

This article examines Mexico's industrial policy and economic performance, focusing on an analysis of the structural changes in its manufacturing sector associated with NAFTA. The aim of the article is to improve our understanding of why the post-NAFTA evolution of the Mexican economy has been characterized by lights and shadows, with low inflation, low budget deficits and a surge in non-oil exports on the one hand, and on the other hand a slower than expected expansion of economic activity and employment. The article also presents some policy implications on the need for a new development agenda if Mexico is to finally succeed in its quest for high and sustained economic growth.