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Bolivia: The Hydrocarbons Boom and the Risk of Dutch Disease
Author:
Mr. Eugenio M Cerutti
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Mr. Mario Mansilla
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Series:
IMF Working Papers
Volume/Issue:
Volume 2008: Issue 154
Language:
English
Publication Date:
01 Jun 2008
DOI:
https://doi.org/10.5089/9781451870121.001
ISBN:
9781451870121
ISSN:
1018-5941
Pages:
20
Keywords:
WP; government; price; effect; export; YPFB
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The hydrocarbons sector has become one of the most dynamic economic activities in the Bolivian economy and the main driver of improved export performance and international reserve accumulation. The central role of the hydrocarbons sector in the economy is attributable to the high levels of investment made in the late 1990s, which permitted much higher production levels, particularly of natural gas. However those positive developments in the hydrocarbons sector have given rise to the possibility of a new case of "Dutch disease." While Bolivia's economy has already seen many benefits from its higher gas exports, especially in terms of lower external vulnerability and improved fiscal stance, the new resources could also limit the development of other economic sectors in terms of output and factor income. This paper explores the transmission channels of Dutch disease, as well as its main symptom, the appreciation of the real exchange rate
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund