Los Determinantes del Nível de Precios en México: Un Enfoque Heterodoxo

ABSTRACT The objective of this essay is to analyze the effects of the minimal nominal wage, a monetary aggregate and the exchange rate on the price level using the Johansen procedure for co-integration. The empirical evidence indicates the existence of a long-term relationship among these variables and the price level that can be interpreted as a price equation. The econometric model allows establishing the specific weights of each of these variables on the price level. Furthermore, the empirical evidence rejects the weak exogeneity hypothesis that confirms the existence of a feedback between these variables. This information was used to build an econometric model in order to simulate and forecast the dynamic of prices in Mexico with satisfactory statistical properties and structural stability.