Like the rest of the poor periphery, Mexico fought with de-industrialization in
the century before the 1870s. Yet, Mexican manufacturing defended itself better
than did the rest of the poor periphery. Why Mexican exceptionalism? This article
decomposes the sources of de-industrialization into productivity events
abroad, globalization forces connecting Mexico to those markets, and domestic
forces. It uses a neo-Ricardian model to implement the decomposition, advocates
a price dual approach, and develops a new price and wage data base.
Mexican exceptionalism was due to weaker Dutch disease effects, better wage
competitiveness, and the policy autonomy to foster industry.