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Impact of NFPS Capital Expenditure on Economic Growth in Bolivia in years 2006-2016


  • Joab Valdivia

    (Banco Central de Bolivia)


In recent years, public investment has become considerably more dynamic with the application of the Economic Social Communitarian Productive Model (MESCP) since 2006, which helped reactivate and boost the domestic demand, unlike what happened in previous periods. The scenario simulations based on a Dynamic Stochastic General Equilibrium (DSGE) model proposed by the study reveal the importance of capital expenditure in economic growth. The results show that changes in capital spending in the short term persistently boost economic growth and have positive effects on con-sumption and private investment, dismissing the existence of a possible crowding-out effect in the private sector.

Suggested Citation

  • Joab Valdivia, 2017. "Impact of NFPS Capital Expenditure on Economic Growth in Bolivia in years 2006-2016," Cuadernos de Investigación Económica Boliviana, Ministerio de Economía y Finanzas Públicas de Bolivia, vol. 2(1), pages 1-23, December.
  • Handle: RePEc:efp:journl:v:2:y:2017:i:1:p:1-23

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    More about this item


    Bayesian Estimation; Tax Expenditure; Public Investment; Dynamic Stochastic Gen-eral Equilibrium (DSGE) model; Fiscal Policy;
    All these keywords.

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages


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