Balance of payments constrained growth model: evidence for Bolivia 1953-2002

Arevilca Vasquez, Bismarck Javier and Risso Charquero, Adrian Winston (2007): Balance of payments constrained growth model: evidence for Bolivia 1953-2002.

Abstract

Theoretical and empirical literature have focused on supply factors when studying economic growth determinants. The present work analyzes demand factors as determinants of the Bolivian economic growth between 1953-2002 using framework introduced by Thirlwall (1979). According to cointegration analysis exports were an important determinant in the Bolivian economic growth for the whole period. In addition, real exchange rate presents a negative relationship respect to the long run growth. Further results show that Bolivian imports are more elastics than exports respect to the GDP, determining a negative impact in trade balance. An hypothesis is that the implemented economic model after 1985 has increased the external constraint of the country causing a process of “deindustrialization”.

• Item Type: MPRA Paper
• Language: English
• Keywords: Bolivia, Growth; Thirlwall’s Law; Cointegration
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance; C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C32 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes ; State Space Models; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade

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