Exchange-Rate Policy in a Dollarized Economy: Implications for Growth and Employment in Bolivia

We analyzed the impact of currency devaluation on the Bolivian economy, employing a dynamic and extended version of the PEP 1-1 standard model to simulate effects impact on both the main macroeconomic aggregates and the financial stocks and flows of economic agents. We built a new Financial Social A...

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Autores principales: Cicowiez, Martín, Machicado, Carlos Gustavo, Muriel, Beatriz, Herrera Jiménez, Alejandro, Rios, Alejandra
Formato: Articulo Documento de trabajo
Lenguaje:Inglés
Publicado: 2020
Materias:
Economía
Foreign exchange policy
macroeconomic policy
CGE modelling
Bolivia
Acceso en línea:http://sedici.unlp.edu.ar/handle/10915/126628
Aporte de:
SEDICI (UNLP) de Universidad Nacional de La Plata
id I19-R120-10915-126628
record_format dspace
institution Universidad Nacional de La Plata
institution_str I-19
repository_str R-120
collection SEDICI (UNLP)
language Inglés
topic Economía
Foreign exchange policy
macroeconomic policy
CGE modelling
Bolivia
spellingShingle Economía
Foreign exchange policy
macroeconomic policy
CGE modelling
Bolivia
Cicowiez, Martín
Machicado, Carlos Gustavo
Muriel, Beatriz
Herrera Jiménez, Alejandro
Rios, Alejandra
Exchange-Rate Policy in a Dollarized Economy: Implications for Growth and Employment in Bolivia
topic_facet Economía
Foreign exchange policy
macroeconomic policy
CGE modelling
Bolivia
description We analyzed the impact of currency devaluation on the Bolivian economy, employing a dynamic and extended version of the PEP 1-1 standard model to simulate effects impact on both the main macroeconomic aggregates and the financial stocks and flows of economic agents. We built a new Financial Social Accounting Matrix for the year 2014 and calibrated the model to it. Besides simulating a devaluation of the nominal exchange rate, we also analyzed a policy-response scenario, an external-shock scenario, and a gradual-devaluation scenario. In the policy-response scenario, devaluation was accompanied by a reduction in government expenses (fiscal adjustment); in the external-shock scenario, devaluation came with an increase in the export price of gas (main export commodity); and, in the gradual-devaluation scenario, the exchange-rate policy relaxed gradually. The external-shock scenario dominated the other scenarios in terms of higher average growth and less average unemployment. The fiscal-adjustment scenario, however, dominated in terms of inflation, though it implied an inflationary shock in 2020.
format Articulo
Documento de trabajo
author Cicowiez, Martín
Machicado, Carlos Gustavo
Muriel, Beatriz
Herrera Jiménez, Alejandro
Rios, Alejandra
author_facet Cicowiez, Martín
Machicado, Carlos Gustavo
Muriel, Beatriz
Herrera Jiménez, Alejandro
Rios, Alejandra
author_sort Cicowiez, Martín
title Exchange-Rate Policy in a Dollarized Economy: Implications for Growth and Employment in Bolivia
title_short Exchange-Rate Policy in a Dollarized Economy: Implications for Growth and Employment in Bolivia
title_full Exchange-Rate Policy in a Dollarized Economy: Implications for Growth and Employment in Bolivia
title_fullStr Exchange-Rate Policy in a Dollarized Economy: Implications for Growth and Employment in Bolivia
title_full_unstemmed Exchange-Rate Policy in a Dollarized Economy: Implications for Growth and Employment in Bolivia
title_sort exchange-rate policy in a dollarized economy: implications for growth and employment in bolivia
publishDate 2020
url http://sedici.unlp.edu.ar/handle/10915/126628
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