excessive regulation and lack of competition in key areas. current structural reforms have the potential to tackle some of these problems if the new rules and their implementation provide a reliable framework for better regulation and increased competition. on the other hand, the current economic upturn faces several challenges, including those associated with less favorable external conditions. finally, a rise in inflation this year poses risks that should be monitored carefully in order to assure that convergence to the permanent inflation target is renewed soon. bis central bankers ’ speeches

paper no. 19262. see, for example, maloney, w. and j. mendez ( 2004 ), “ measuring the impact of minimum wages : evidence from latin america. ” in heckman, j. j. and c. pages ( 2004 ), law and employment : lessons from latin american and the caribbean. chicago : university of chicago press. there is evidence that the decline in real minimum wages in mexico increased employment for less - skilled female workers. see feliciano, z. m. ( 1998 ), “ does the minimum wage affect employment in mexico? ” eastern economic journal, 24 ( 2 ). bis central bankers ’ speeches an update on structural reforms as you all know, mexico has embarked on an ambitious structural reform agenda, encompassing many sectors of the economy, including the labor market, education, the financial sector, telecommunications, and energy. already this year, the laws that cement and put the finishing touches on the reforms have been finalized. but the devil, indeed, is in the details. the quality of implementation is of the utmost importance for the transformations to yield their expected benefits. reforms are currently in the implementation stage. some of the changes have come into effect with the mere publication of the new laws, such as the prohibition of bundled sales of products in the financial sector. others imply specific actions already contemplated. for example, in education, the first generalized test is in place to qualify a teacher to receive an elementary school post, breaking with a long tradition in which new graduates from teaching schools were automatically hired. in the financial sector, a newly established resolution scheme is being applied to the case of a small bank without incident. in telecommunications, the arrival of new competitors, drawn by a changed set of rules and conditions in the marketplace, sets the stage for a possible shakeup. auctions for nationwide television licenses are in the offing. much interest is focused on the energy reform. geographical areas for oil and gas exploration and production have already been allocated to pemex, and the first round of auctions for the private sector will take place early next year. these opportunities are generating enthusiasm in the private sector and should draw significant investment from both domestic and foreign companies. greater competition, in turn, should boost total factor productivity and potential gdp growth in the medium term. to take full advantage of this situation, mexico needs to complement the already enacted reforms with changes that would improve the environment for conducting business. these measures should include strengthening the rule of law, investing further