Jesus Cañas

Maquiladora Employment Dynamics in Nuevo Laredo

The Nuevo Laredo maquiladora sector has grown enormously during the last two decades. The short-term time series characteristics of this portion of the regional economy are analyzed in an attempt to quantify the trends underlying this remarkable performance. Parameter estimation is accomplished via linear transfer function (LTF) analysis. Data are drawn from the January 1990-December 2000 sample period. Empirical results indicate that real wage rates, maquiladora plants, U.S. industrial activity, and the real exchange rate of the peso play significant roles in determining month-to-month fluctuations in maquiladora employment. Furthermore, sub-sample forecast simulation exercises are conducted as an additional means for verifying model reliability. Empirical results indicate that the forecasts generated with the LTF model are less accurate than those associated with a simple random walk procedure for twelve separate step-length periods.

Tipping Our Hats to the Ten-Gallon Economy

Texas has grown twice as fast as the nation for over 25 years. This fantastic growth has lifted many boats. Living standards have increased along with employment opportunities, attracting record migration to the state. Per capita income was just a percentage point shy of the nation’s in 2014, a level previously achieved only at the height of the 1980s oil boom. Meanwhile, Texas’ unemployment rate has fallen below the nation’s and remained there for over a decade. Home affordability has remained high—the American dream come true for many. There are several reasons for this superior growth record, including low taxes, a business-friendly climate, and booming energy sector. This chapter introduces the articles in this volume, which applaud these accomplishments and explore their root causes, all the while raising concerns about the tradeoffs inherent in the Texas model and their implications for the state’s future.

Texas Comparative Advantage and Manufacturing Exports

Texas exports more than any other US state. While Texas has gained global market share in some industries, it has lost ground in others. We identify the comparative advantage of Texas’ exports and analyze how that has evolved over the past decade. We then look at Texas’ comparative advantage versus its primary global competitors and analyze domestic competitors based on how total factor productivity could have influenced export performance. The results suggest that Texas’ comparative advantage in manufacturing markets has increased as Texas industries have become more productive. In addition, the results show that relative wage differentials have allowed Texas to become more competitive and gain global market share vis-a-vis its closest domestic rivals.