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The Monetary and Fiscal History of Bolivia, 1960–2017

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Listed:
  • Timothy J. Kehoe
  • Carlos Gustavo Machicado
  • José Peres-Cajías

Abstract

After the economic reforms that followed the National Revolution of the 1950s, Bolivia seemed positioned for sustained growth. Indeed, it achieved unprecedented growth from 1960 to 1977. The rapid accumulation of debt due to persistent deficits and a fixed exchange rate policy during the 1970s led to a debt crisis that began in 1977. From 1977 to 1986, Bolivia lost almost all the gains in GDP per capita that it had achieved since 1960. In 1986, Bolivia started to grow again, interrupted only by the financial crisis of 1998–2002, which was the result of a drop in the availability of external financing. Bolivia has grown since 2002, but government policies since 2006 are reminiscent of the policies of the 1970s that led to the debt crisis, in particular, the accumulation of external debt and the drop in international reserves due to a de facto fixed exchange rate since 2012.

Suggested Citation

  • Timothy J. Kehoe & Carlos Gustavo Machicado & José Peres-Cajías, 2019. "The Monetary and Fiscal History of Bolivia, 1960–2017," NBER Working Papers 25523, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:25523
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    References listed on IDEAS

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    1. Krugman, Paul, 1979. "A Model of Balance-of-Payments Crises," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 11(3), pages 311-325, August.
    2. Barja, Gover, 1999. "Las reformas estructurales bolivianas y su impacto sobre inversiones [Bolivian structural reforms and their impact on investment]," MPRA Paper 23479, University Library of Munich, Germany.
    3. Mauricio Garrón B. & Carlos Gustavo Machicado & Katherina Capra, 2003. "Privatization in Bolivia: The Impact on Firm Performance," Research Department Publications 3154, Inter-American Development Bank, Research Department.
    4. Jemio, Luis Carlos, 2008. "La Inversión y el Crecimiento en la Economía Boliviana," Documentos de trabajo 1/2008, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana.
    5. Timothy J. Kehoe & Edward C. Prescott, 2002. "Great Depressions of the Twentieth Century," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(1), pages 1-18, January.
    6. Timothy J. Kehoe & Edward C. Prescott, 2007. "Great depressions of the twentieth century," Monograph, Federal Reserve Bank of Minneapolis, number 2007gdott.
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    Cited by:

    1. Martinelli, Cesar & Vega, Marco, 2019. "The economic legacy of General Velasco: Long-term consequences of interventionism," Working Papers 2019-010, Banco Central de Reserva del Perú.
    2. Marco Vega & César Martinell, 2019. "El legado económico del general Velasco: consecuencias a largo plazo del intervencionismo," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 42(84), pages 102-133.
    3. Lucas DuPriest, 2019. "Coworking Spaces in La Paz, Bolivia: Urban Effects and Potential Creation of New Opportunities for Local Economic Development," Development Research Working Paper Series 07/2019, Institute for Advanced Development Studies.

    More about this item

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • N16 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Latin America; Caribbean

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