This paper documents major predictions made by economists during the debate over the potential economic effects of NAFTA. We focus our attention on employment, trade, and investment. The consensus concluded that the effects of NAFTA would be positive ...
This paper documents major predictions made by economists during the debate over the potential economic effects of NAFTA. We focus our attention on employment, trade, and investment. The consensus concluded that the effects of NAFTA would be positive but small for the U.S. and Canada economies, and positive and large for Mexico. From the post-NAFTA evidences, we evaluated the ex-ante predictions. The result shows that the forecasts are basically correct; expansion of trade and investment through the agreement has created more stable, better-paying jobs in the region. The facts indicate that all three countries have been winners. Valuable lessons from the NAFTA experience are drawn.