Gordon Hanson Quoted in News Story on PRI's America Abroad
The ties that bind the Mexican and US economies
11/23/2009
PRI's America Abroad
Three quarters of Mexico's exports to the US are tied to manufacturing. Auto making, electronics and textiles are now highly integrated: Made in Mexico, sold in the United States.
"Mexico has become the shock absorber for the US economy, as the US and Mexico have formed a global production network," said Gordon Hanson, Director of the Center on Pacific Economies at UC San Diego.
But in the downturn, orders to Mexican factories are the first to go. The fluctuations in unemployment have been twice as high as corresponding industries in the US.
"So because we've moved the more volatile parts of production to Mexico, Mexico has bigger swings in its economy," said Hanson. "And the United States has smaller swings than we would have, absent that partnership with Mexico."
Read the transcript of the story here. Listen to the story here.
Related Links
Gordon Hanson's faculty webpage
