Agustín Carstens

• 1. The Chicago Scholar

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  Agustín Carstens was born on the 9th of June 1958 in Mexico City. He began his academic journey at the Mexico Autonomous Institute of Technology where he earned a bachelor's degree in economics. A scholarship allowed him to travel across the border for advanced studies. He completed both a master's degree and a doctorate in economics at the University of Chicago by 1985. His thesis advisor was Michael Mussa, who later became the economic counselor at the International Monetary Fund from 1991 to 2001. This educational foundation prepared him for a life dedicated to macroeconomic stability.

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• 2. Guardian Of Reserves

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  Carstens returned to Mexico in the mid-1980s to rejoin the Bank of Mexico. Before turning thirty years old, he was appointed treasurer and took charge of national reserves. Rising through the ranks during the early 1990s, he served as chief of staff under chairman Miguel Mancera. By the end of the 1990s, he held the role of Director General of Economic Research. In this capacity, he designed economic policy alongside Governor Guillermo Ortiz Martínez following the Tequila Crisis and the Russian default crisis. He co-authored an analysis with Deputy Governor Francisco Gil Díaz suggesting the Mexican crisis resulted largely from external circumstances and political problems rather than internal failure.

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• 3. The IMF Years

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  After many years at the Bank of Mexico, Carstens moved to the International Monetary Fund on the 1st of August 2003. He served as deputy managing director until the 16th of October 2006. This position placed him among three deputies reporting directly to the director and the board. On the 8th of July 2005, he sat between the minister of finance and the president of the Bank of Guatemala during an official visit. His tenure concluded when he left the organization to coordinate the economic policy program for Felipe Calderón. Calderón had just been elected president of Mexico and validated his appointment shortly after the election results were confirmed.

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• 4. Hedging The Future

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  Carstens took office as secretary of finance in the cabinet of Felipe Calderón in 2007. On the 26th of March 2007, he was appointed chairman of the joint World Bank/IMF Development Committee. This role customarily went to a developing country finance minister. As secretary, he made an unconventional decision regarding oil earnings. He hedged Mexico's oil revenues for 2009 against possible price falls. This strategy generated an $8 billion profit for the country during volatile market conditions. In the aftermath of 2007 popular protests about rising food prices, Carstens viewed high food costs as a positive driver for investment in agriculture.

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• 5. The Senate Vote

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  President Felipe Calderón nominated Carstens to lead the Bank of Mexico on the 9th of December 2009. He replaced Guillermo Ortiz who had served as governor for twelve years. Ortiz had successfully reduced inflation from double digits to 4 percent by the end of 2009. The Senate confirmed Carstens' appointment on the 15th of December 2009 with 81 votes in favor and 19 votes against. His confirmation marked a significant transition period for Mexican monetary policy following the global financial crisis.

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• 6. Cycles Of Volatility

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  Carstens identified five characteristics that distinguish business cycles in emerging economies from those in industrialized nations. These cycles are strongly tied to trends in developed countries yet remain more volatile. Price fluctuations affect these economies differently than they do stable markets. Rapid capital outflows made possible under corporate globalization can cause severe harm. Exchange-rate regimes create specific problems unique to developing regions. He proposed structural changes including central bank autonomy and privatization of production to address these issues.