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Effects of the Global Financial and Economic Crisis on the Bolivian Economy: A CGE Approach

Author

Listed:
  • Martin Cicowiez

    (CEDLAS-Universidad Nacional de La Plata)

  • Carlos Gustavo Machicado

    (Institute for Advanced Development Studies)

Abstract

This paper analyses the impact of the Global Financial Crisis on the Bolivian economy. The PEP 1-1 Standard Model has been employed to analyze the effects of a reduction in (i) the world export prices of mining and agriculture, (ii) the world demand of textiles, and (iii) transfers to households (i.e., remittances) from abroad. The model has been calibrated to a new 2006 SAM for Bolivia. The households have been disaggregated according to their location (urban and rural) and ethnicity (indigenous and non-indigenous). The factors of production have been disaggregated into skilled and unskilled labor, capital, and natural resources. Not surprisingly, our results highlight the relevance of the decrease in the export price of natural gas in explaining the negative effects of the Global Financial Crisis.

Suggested Citation

  • Martin Cicowiez & Carlos Gustavo Machicado, 2010. "Effects of the Global Financial and Economic Crisis on the Bolivian Economy: A CGE Approach," Development Research Working Paper Series 10/2010, Institute for Advanced Development Studies.
    • Handle: RePEc:adv:wpaper:201010
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    Cited by:

    1. Carmen Estrades & Cecilia Llambí, 2013. "Lessons from the 2008 Financial Crisis: Policy Responses to External Shocks in Uruguay," The Developing Economies, Institute of Developing Economies, vol. 51(3), pages 233-259, September.

    More about this item

    Keywords

    Computable General Equilibrium Model; Financial Crisis; Forecasting and Simulation;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • G01 - Financial Economics - - General - - - Financial Crises
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications

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