A general equilibrium model of domestic commerce in Mexico

Timothy J. Kehoe, Jaime Serra-Puche, Leopoldo Solis

Research output: Contribution to journalArticlepeer-review

5 Scopus citations


In this paper we develop a general equilibrium model of the Mexican economy that focuses on the commercial sector, particularly retailing. Consumers purchase goods in different retail establishments, that sell differentiated goods at different prices. Where each consumer decides to make purchases depends on various price and locational considerations. The model has been calibrated to replicate the Mexican economy in 1977, the latest year for which a complete data set is available. We use it to analyze both the impact of the 1980 fiscal reform, a major policy charge for the economy as a whole, and that of a hypothetical development project aimed specifically at the commercial sector. Although our model was conceived and developed well prior to the current period of highly inflationary policies of the debt crisis, the latter was taken into consideration during both the simulations and their policy evaluation.

Original languageEnglish (US)
Pages (from-to)1-28
Number of pages28
JournalJournal of Policy Modeling
Issue number1
StatePublished - Feb 1984


Dive into the research topics of 'A general equilibrium model of domestic commerce in Mexico'. Together they form a unique fingerprint.

Cite this