ELI5: Explain Like I'm 5

1994 economic crisis in Mexico

Okay kiddo, let me tell you about something that happened in Mexico a long time ago.

In 1994, the economy of Mexico went through a big crisis. This means that people had a really hard time finding work, making money, and buying things they needed.

The reason this happened is a bit complicated, but I'll try my best to explain it to you. Mexico had borrowed a lot of money from other countries to pay for things like new roads, buildings, and factories. But, the people who had loaned Mexico the money started to worry that they would not get their money back. This made them feel scared and they started to take their money out of Mexico.

When the people who had loaned the money took it out of Mexico, it caused a big problem. The Mexican money, called pesos, started to lose its value. This means that the pesos you had in your piggy bank would not buy as much as they used to.

This made things even worse because people could not buy as much as they used to. This caused factories to shut down and people to lose their jobs because companies could not sell as much stuff as they used to.

It took a long time for Mexico to recover from this crisis, but eventually, things got better. The Mexican government made some changes to how they borrowed and spent money to make sure this did not happen again in the future.