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The Monetary and Fiscal History of Bolivia, 1960-2017

Timothy Kehoe (), Carlos Machicado Salas () and José Peres-Cajías ()

No 579, Staff Report from Federal Reserve Bank of Minneapolis

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. Mistakes in economic policies, especially 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.

Keywords: Hyperinflation; Monetary policy; Bolivia; Fiscal policy; Public enterprises (search for similar items in EconPapers)
JEL-codes: E52 E63 H63 N16 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2019-02-13
New Economics Papers: this item is included in nep-his, nep-mac and nep-opm
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmsr:579

DOI: 10.21034/sr.579

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