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Dutch disease and the labor market in Bolivia

Author

Listed:
  • Alarcon, Samuel
  • Morales, Rolando
  • Gonzales, Rodrigo

Abstract

In the last 10 years, Latin America and especially Bolivia has experienced a period of unprecedented boom induced by substantial revenues on the external front, due to the rise in the prices of exports, remittances and capital flows. This paper argues that Bolivia went through Dutch disease between 2003 and 2014 with an etiology somewhat different to the classic one, and studies its link to the labor market. In the middle of 2014 began a slow decline in the price of minerals and, in 2015, the oil price collapsed violently, interrupting the course of Dutch disease and inaugurating a new period of crisis. This paper explains the underlying mechanisms in both stages and an econometric model is presented to lend consistency to the explanations.

Suggested Citation

  • Alarcon, Samuel & Morales, Rolando & Gonzales, Rodrigo, 2016. "Dutch disease and the labor market in Bolivia," MPRA Paper 97914, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:97914
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    References listed on IDEAS

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    1. Mulder, Nanno, 2006. "Aprovechar el auge exportador de productos básicos evitando la enfermedad holandesa," Comercio Internacional 4423, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    2. Mr. Eugenio M Cerutti & Mr. Mario Mansilla, 2008. "Bolivia: The Hydrocarbons Boom and the Risk of Dutch Disease," IMF Working Papers 2008/154, International Monetary Fund.
    3. Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, vol. 92(368), pages 825-848, December.
    4. Oomes, Nienke & Kalcheva, Katerina, 2007. "Diagnosing Dutch disease : Does Russia have the symptoms?," BOFIT Discussion Papers 7/2007, Bank of Finland, Institute for Economies in Transition.
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    Keywords

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    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General

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