The first. a "status quo" projection. assumed a continuation of the historic differential in the return on capital between the U.S. and Mexico. Interest rates are assumed to be stable. oil prices rise to reach their 1982 level by the year 2000. Mexico is able to receive $4.5 billion (nominal) in new lending per year to maintain its debt payments. the Immigration Reform and Control Act (IRCA) of 1986 is assumed to workin that costs to migrants rise by twenty percent and wages for undocumented workers fall by ten percent. The second scenario has the same assumptions. except investors are allowed to be more confident in Mexico as a result of a freetrade agreement. Free trade is modelled as an elimination of tariffs between the two countries over 10 years beginning in 1992.
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undocumented Immigration migrants