Spatial interaction regional model for the mexican economy (SIRMME): a special case for Mexico City Metropolitan Area

Abstract

This paper analyzes empirically a macro model and a regional model to explain Mexico and Mexico City economies respectively. Typically, regional economic modeling considers either a top-down or bottom-up approach to model regional difference in economic growth. This paper shows results that explain regional difference in Mexico from the bottom-up through a special case that focuses on the spatial interaction between Mexico City - the main economic engine of Mexico- and the rest of the country during the period 2000-2010. Our results indicate that variables associated with human capital, internal migration, "creative class", micro-firms and spatial interaction among micro-regions were conditioning the differential growth between Mexico City and the whole country during the period 2000-2010. Likewise, we present econometric results of a typical macro model that explains economic growth in Mexico by different income effects on components of aggregate demand during the period 1993-2010.