Editing Carlos Salinas de Gortari (section)

===Economic issues===
The economic bubble gave Mexico a prosperity not seen in a generation. This period of rapid growth coupled with low inflation prompted some political thinkers and the media to state that Mexico was on the verge of becoming a "First World nation". In fact, it was the first of the "newly industrialized nations" to be admitted into the [[Organisation for Economic Co-operation and Development]] (OECD) in May 1994. It was known that the peso was overvalued, but the extent of the Mexican economy's vulnerability was either not well known or downplayed by both the Salinas administration and the media.{{citation needed|date=December 2014}} This vulnerability was further aggravated by several unexpected events and macroeconomic mistakes made in the last year of his administration.

Several economists and historians have analyzed some of the events and policy mistakes that precipitated the crisis of December 1994.<ref>Hufbauer and Schoot, (2005)</ref> In keeping with the PRI election-year practices, Salinas launched a spending spree to finance popular projects, which translated into a historically high deficit. This budget deficit was coupled with a current account deficit, fueled by excessive [[consumer spending]] as allowed by the overvalued peso. In order to finance this deficit, the Salinas administration issued ''tesobonos'', an attractive debt instrument that insured payment in dollars instead of pesos.

Increasing current account deficit fostered by government spending, caused alarm among Mexican and foreign T-bill (''tesobono'') investors, who sold them rapidly, thereby depleting the already-low central bank reserves (which eventually hit a record low of $9&nbsp;billion). The economically orthodox thing to do, in order to maintain the fixed exchange rate (at 3.3 pesos per dollar, within a variation band), would have been to sharply increase interest rates by allowing the monetary base to shrink, as dollars were being withdrawn from the reserves.<ref>Hufbauer & Schott, 2005</ref> Given the fact that it was an election year, whose outcome might have changed as a result of a pre-election-day economic downturn, the [[Bank of Mexico]] decided to buy Mexican Treasury Securities in order to maintain the monetary base, and thus prevent the interest rates from rising. This, in turn, caused an even more dramatic decline in the dollar reserves. These decisions aggravated the already delicate situation, to a point at which a crisis became inevitable and devaluation was only one of many necessary adjustments.