Crisis of '94

We were all little and we do not remember, but I think everyone has at least once heard their parents or relatives mention something about the crisis occurred in 1994. But we do not really know the details, and as it is an event that happened around the time Mexico signed the NAFTA agreement it is relevant to what we are studying. We cannot point out and say exactly the cause of the crisis, because more than a single event that provoked it, it was a series of different situations that led to the finally devaluation of the Mexican peso.

As it has happened with many other countries, the careless use of credit, the depreciation of the peso against the dollar. Remember that at that time, the dollar had a fixed price, no matter what the situation of the market, the price was always the same. This was suposedly intented to help stabilize the economy. The rise of US interest rates also helped along. There is also an important event, the assasination of the Presidential Candidate Luis Donaldo Colosio is also considered to have helped the provoked the crisis.
This crisis represented a huge setback in the economy that affected most sectors of the population. And I consider it's important to know about it to understand how to deal with crisis.


http://www.cato.org/pubs/journal/cj17n3-14.html