Abstract
D.Comm.
The objective of this thesis was to examine the dynamics of Mexico's external economic relations during the period 1968-1995.
Since the early seventies, the workings of the international monetary system has been governed more by implicit rules and conventions based on sound market principles than rules as were the case under the fixed exchange rate system of Bretton Woods. These "rules of the game" dictated that if a country wanted to be part of the global village and reap the benefits thereof, such a country should adhere to market forces and administer its monetary-fiscal policy in such a way as to ensure that the delicate balance between the domestic and international economic environment is maintained. In the event of a deviation from these rules, a country, in this instance Mexico, would find itself in a position where it is heavily penalised for not playing according to the rules of the game.
Starting in 1976, the Mexican economy was characterised by ongoing exchange rate crises, which seemed to be a recurring phenomenon repeating itself more or less every six years. Time and again a misalignment in Mexico's monetary-fiscal policy led to a build-up of pressures and tensions in the external accounts of the country, especially the balance of payments and eventually disruption of the economic growth process and relations with the external world.