Public expenditure policy in Bolivia: Growth and welfare

Arbeitspapier

It has been widely documented that fiscal policy can promote economic growth, when it is based on an efficient provision of pubic capital. But little work has been done, in Bolivia, in relation to the macroeconomic and sectoral impacts of increasing public investment in infrastructure. This paper develops a Dynamic Stochastic General Equilibrium (DSGE) model for a small open economy with five sectors: Non-tradable or services, importable or manufacturing, hydrocarbons, mining and agriculture. The model is parameterized and solved for the Bolivian economy and several interesting scenarios are simulated by changing government expenditures, taxes, country risk, Total Factor Productivity, effectiveness of public capital and terms of trade. This analysis is relevant for the Bolivian economy, because the government is using fiscal policy as one of its main tool to attack poverty and aims to put public investment as the foremost instruments to promote growth and welfare.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Development Research Working Paper Series ; No. 04/2010

Classification and Topics

• Classification: Wirtschaft ; Fiscal Policy ; National Government Expenditures and Related Policies: Infrastructures; Other Public Investment and Capital Stock ; One, Two, and Multisector Growth Models
• Subject: Fiscal Policy ; Infrastructure ; Multisector Growth Model ; Finanzpolitik ; Infrastrukturinvestition ; Dynamisches Gleichgewicht ; Kleines-offenes-Land ; Mehr-Sektoren-Modell ; Bolivien

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Machicado, Carlos Gustavo ; Estrada, Paul ; Flores, Ximena
• Event: Veröffentlichung
• (who): Institute for Advanced Development Studies (INESAD)
• (where): La Paz
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/45691
• Last update: 10.03.2025, 11:44 AM CET