Munich Personal RePEc Archive

Dutch disease and the labor market in Bolivia

Alarcon, Samuel and Morales, Rolando and Gonzales, Rodrigo (2016): Dutch disease and the labor market in Bolivia.

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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.

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