Economic Growth Driven by the Mexican Fourth Transformation Policy

Abstract

ABSTRACT The economic policy of the fourth transformation (4T) of Mexico - as the actual president Andrés Manuel López Obrador defines his mandate - is characterized by being cautious and responsible for public spending, making investment decisions more effective, and redistributing wealth to sustain domestic consumption. The internal demand has been promoted by increasing poor people's disposable income through subsidies and transfers and several policies aimed at raising minimum wages. As a framework for these direct policies to boost economic growth, the fight against corruption helped achieve these results more effectively. This work aims to analyze whether the 4T policy increased economic growth in Mexico. We applied two econometric techniques to test our hypothesis: interrupted time series analysis, controlling for robustness of the results, and breakpoint regression analysis. In both cases, we robustly showed that the 4T economic policy has positively impacted economic growth in Mexico.