Wealth of Nations and Remittances in Mexico

Abstract

In view of the three-century anniversary of the birth of Adam Smith, this year the works and comments on the impact and relevance of the central proposals of his book The Wealth of Nations by Adam Smith (1776) have multiplied, a work that raises the importance markets, the division of labor, the specialization of countries and state intervention in the generation of wealth and the well-being of the population. Based on these approaches and facing the current economic reality of Mexico, we maintain that the remittances received in the country from Mexican migrants in the United States have a contradictory meaning in the perception of national wealth: they represent a growing flow of money from abroad that It helps to stabilize the national economy macroeconomically, supports economic growth in the regions with the highest reception, and increases the well-being of 1.8 million recipient households. The COVID-19 pandemic boosted the growth of the digital market known as Fintech in the sending of remittances, taking advantage of the diffusion of information technologies and the reduction of their costs, those companies in the remittance transfer market are growing that seek to take advantage of its benefit the expansion situation in that market. On the other hand, the amount of migration and remittances is proportional to the various economic crises for 40 years and the chronic inability to generate economic development with employment and well-being for the entire population. In addition, the greater vulnerability of remittance recipients is corroborated to face catastrophic situations given the uncertainty of their growth in the following years, a situation that would worsen even more without remittances.