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Test the Hypothesis of Dutch Disease in the Bolivian economy

Author

Listed:
  • Cerezo Aguirre, Sergio

    (SEBOL menber and professor at the Bolivian Catholic University)

Abstract

In recent years, Bolivia has experienced a strong inflow of foreign currency due in part to a sharp rise in prices of natural resources exports; an element with the real appreciation has created concern about whether the economy is experiencing the Disease Dutch (DD). This document based on conditions Oomes and Kalcheva (2007) for them (real appreciation, slower growth in manufacturing, rapid growth of services and higher wages), finds no empirical evidence on this phenomenon. In particular, an overvalued exchange rate is seen or a persistent misalignment of the real exchange rate, de-industrialization and manufacturing. The evolution of the services sector and their prices and real wages do not respond to the dynamics of the industry boom. However, the document considers that the presence of this phenomenon deserves close scrutiny.

Suggested Citation

  • Cerezo Aguirre, Sergio, 2014. "Test the Hypothesis of Dutch Disease in the Bolivian economy," Revista Latinoamericana de Desarrollo Economico, Carrera de Economía de la Universidad Católica Boliviana (UCB) "San Pablo", issue 21, pages 93-116, Mayo.
    • Handle: RePEc:ris:revlde:1915
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    References listed on IDEAS

    as
    1. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Natural Resource Abundance and Economic Growth," NBER Working Papers 5398, National Bureau of Economic Research, Inc.
    2. Mr. Claudio A Paiva, 2006. "External Adjustment and Equilibrium Exchange Rate in Brazil," IMF Working Papers 2006/221, International Monetary Fund.
    3. Xavier Sala-i-Martin & Arvind Subramanian, 2013. "Addressing the Natural Resource Curse: An Illustration from Nigeria," Journal of African Economies, Centre for the Study of African Economies, vol. 22(4), pages 570-615, August.
    4. de Mevius, François-Xavier & Albarracin, Ivan, 2008. "Bolivia and the Dutch Disease: What are the Risks and How to Avoid Them?," Documentos de trabajo 9/2008, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana.
    5. Mr. Eugenio M Cerutti & Mr. Mario Mansilla, 2008. "Bolivia: The Hydrocarbons Boom and the Risk of Dutch Disease," IMF Working Papers 2008/154, International Monetary Fund.
    6. Corden, W M, 1984. "Booming Sector and Dutch Disease Economics: Survey and Consolidation," Oxford Economic Papers, Oxford University Press, vol. 36(3), pages 359-380, November.
    7. repec:zbw:bofitp:2007_007 is not listed on IDEAS
    8. Thorvaldur Gylfason, 2006. "Natural Resources and Economic Growth: From Dependence to Diversification," Springer Books, in: Harry G. Broadman & Tiiu Paas & Paul J.J. Welfens (ed.), Economic Liberalization and Integration Policy, pages 201-231, Springer.
    9. Ms. Katerina Kalcheva & Nienke Oomes, 2007. "Diagnosing Dutch Disease: Does Russia Have the Symptoms?," IMF Working Papers 2007/102, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Dutch Disease; Macroeconomy.;

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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