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Impulse on the Aggregate Demand in Bolivia through the coordination of the Monetary and Fiscal Policy in crisis time

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  • Valdivia Coria, Joab Dan
  • Valdivia Coria, Daney

Abstract

At the end of 2014, the Bolivian economy, despite facing negative external shocks (falling oil prices), registered a high economic growth in the region of Latin America. Monetary policy was aimed at keeping the government bond rate close to zero and raising liquidity levels in the economy (monetary policy expansive). On the part of the government, the two main sources of income of the nonfinancial public sector (SPNF) are: i) tax revenues and ii) the sale of hydrocarbons (gas), at that time Bolivia's fiscal policy was countercyclical To the behavior of the Latin American Product (increases in fiscal expenditure in infrastructure). These antecedents, aid to the interest of the study of the coordination of the economic policy in Bolivia. The structure of a Dynamic Stochastic General Equilibrium Model (DSGE) helps us to understand the transmission channels of shocks (in Taylor rule, Phillips curve and public investment) and how the monetary and fiscal policy reacts to these shocks.

Suggested Citation

  • Valdivia Coria, Joab Dan & Valdivia Coria, Daney, 2017. "Impulse on the Aggregate Demand in Bolivia through the coordination of the Monetary and Fiscal Policy in crisis time," MPRA Paper 79835, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:79835
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    References listed on IDEAS

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    Cited by:

    1. Jemio Hurtado, Valeria, 2020. "Monetary rules in an open economy with distortionary subsidies and inefficient shocks: A DSGE approach for Bolivia," MPRA Paper 102374, University Library of Munich, Germany, revised 14 Jul 2020.

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    More about this item

    Keywords

    Bayesian Estimation; Monetary Policy; Fiscal Policy; Dynamic Stochastic General Equilibrium Model (DSGE).;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E59 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Other
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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