Using Dichotomous Variables to Model Structural Changes in Time Series: An Application to International Trade

This research aimed to elucidate the methodology employed in econometric estimations by utilizing dichotomous variables. These variables served a dual purpose: firstly, they denoted an attribute designed to discern structural changes within a linear relationship, and secondly, they quantified the impact and statistical significance of one or more quantitative independent variables on a dependent variable in the presence of such structural changes. The core of this document covers the presentation of the methodology; additionally, an applied analysis of Mexico's foreign trade is included. This analysis delved into estimating the impact and statistical significance of exports on the economic growth across different periods, reflecting significant structural changes in the development of the Mexican economy.