Mexican economy driven by uncorrelated supply and demand shocks.
The study looked at how supply and demand shocks affect the Mexican economy from 1981 to 2016. They found that supply shocks are not linked to demand shocks, meaning changes in production and consumer demand are separate. This means that supply shocks mainly impact long-term output, while demand shocks affect inflation. The researchers used a specific method to show that these shocks are independent in the Mexican economy.