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

Autores
Cicowiez, Martín; Machicado, Carlos Gustavo; Muriel, Beatriz; Herrera Jiménez, Alejandro; Rios, Alejandra
Año de publicación
2020
Idioma
inglés
Tipo de recurso
documento de trabajo
Estado
versión enviada
Descripción
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.
Facultad de Ciencias Económicas
Centro de Estudios Distributivos, Laborales y Sociales
Materia
Economía
Foreign exchange policy
macroeconomic policy
CGE modelling
Bolivia
Nivel de accesibilidad
acceso abierto
Condiciones de uso
http://creativecommons.org/licenses/by-nc-sa/4.0/
Repositorio
SEDICI (UNLP)
Institución
Universidad Nacional de La Plata
OAI Identificador
oai:sedici.unlp.edu.ar:10915/126628
Acceder
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oai_identifier_str oai:sedici.unlp.edu.ar:10915/126628
network_acronym_str SEDICI
repository_id_str 1329
network_name_str SEDICI (UNLP)
spelling Exchange-Rate Policy in a Dollarized Economy: Implications for Growth and Employment in BoliviaCicowiez, MartínMachicado, Carlos GustavoMuriel, BeatrizHerrera Jiménez, AlejandroRios, AlejandraEconomíaForeign exchange policymacroeconomic policyCGE modellingBoliviaWe 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.Facultad de Ciencias EconómicasCentro de Estudios Distributivos, Laborales y Sociales2020info:eu-repo/semantics/workingPaperinfo:eu-repo/semantics/submittedVersionDocumento de trabajohttp://purl.org/coar/resource_type/c_8042info:ar-repo/semantics/documentoDeTrabajoapplication/pdfhttp://sedici.unlp.edu.ar/handle/10915/126628enginfo:eu-repo/semantics/altIdentifier/issn/1556-5068info:eu-repo/semantics/altIdentifier/doi/10.2139/ssrn.3631405info:eu-repo/semantics/openAccesshttp://creativecommons.org/licenses/by-nc-sa/4.0/Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0)reponame:SEDICI (UNLP)instname:Universidad Nacional de La Platainstacron:UNLP2025-09-29T11:30:22Zoai:sedici.unlp.edu.ar:10915/126628Institucionalhttp://sedici.unlp.edu.ar/Universidad públicaNo correspondehttp://sedici.unlp.edu.ar/oai/snrdalira@sedici.unlp.edu.arArgentinaNo correspondeNo correspondeNo correspondeopendoar:13292025-09-29 11:30:23.127SEDICI (UNLP) - Universidad Nacional de La Platafalse
dc.title.none.fl_str_mv Exchange-Rate Policy in a Dollarized Economy: Implications for Growth and Employment in Bolivia
title Exchange-Rate Policy in a Dollarized Economy: Implications for Growth and Employment in Bolivia
spellingShingle Exchange-Rate Policy in a Dollarized Economy: Implications for Growth and Employment in Bolivia
Cicowiez, Martín
Economía
Foreign exchange policy
macroeconomic policy
CGE modelling
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
dc.creator.none.fl_str_mv Cicowiez, Martín
Machicado, Carlos Gustavo
Muriel, Beatriz
Herrera Jiménez, Alejandro
Rios, Alejandra
author Cicowiez, Martín
author_facet Cicowiez, Martín
Machicado, Carlos Gustavo
Muriel, Beatriz
Herrera Jiménez, Alejandro
Rios, Alejandra
author_role author
author2 Machicado, Carlos Gustavo
Muriel, Beatriz
Herrera Jiménez, Alejandro
Rios, Alejandra
author2_role author
author
author
author
dc.subject.none.fl_str_mv Economía
Foreign exchange policy
macroeconomic policy
CGE modelling
Bolivia
topic Economía
Foreign exchange policy
macroeconomic policy
CGE modelling
Bolivia
dc.description.none.fl_txt_mv 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.
Facultad de Ciencias Económicas
Centro de Estudios Distributivos, Laborales y Sociales
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.
publishDate 2020
dc.date.none.fl_str_mv 2020
dc.type.none.fl_str_mv info:eu-repo/semantics/workingPaper
info:eu-repo/semantics/submittedVersion
Documento de trabajo
http://purl.org/coar/resource_type/c_8042
info:ar-repo/semantics/documentoDeTrabajo
format workingPaper
status_str submittedVersion
dc.identifier.none.fl_str_mv http://sedici.unlp.edu.ar/handle/10915/126628
url http://sedici.unlp.edu.ar/handle/10915/126628
dc.language.none.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv info:eu-repo/semantics/altIdentifier/issn/1556-5068
info:eu-repo/semantics/altIdentifier/doi/10.2139/ssrn.3631405
dc.rights.none.fl_str_mv info:eu-repo/semantics/openAccess
http://creativecommons.org/licenses/by-nc-sa/4.0/
Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0)
eu_rights_str_mv openAccess
rights_invalid_str_mv http://creativecommons.org/licenses/by-nc-sa/4.0/
Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0)
dc.format.none.fl_str_mv application/pdf
dc.source.none.fl_str_mv reponame:SEDICI (UNLP)
instname:Universidad Nacional de La Plata
instacron:UNLP
reponame_str SEDICI (UNLP)
collection SEDICI (UNLP)
instname_str Universidad Nacional de La Plata
instacron_str UNLP
institution UNLP
repository.name.fl_str_mv SEDICI (UNLP) - Universidad Nacional de La Plata
repository.mail.fl_str_mv alira@sedici.unlp.edu.ar
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