The Impact of Inflation, Indebtedness and Public Spending and Deficits on Bolivia's Economic Growth
Year: 2025
Type: article
Abstract: In Bolivia, in the last forty years of democracy, we have gone from a "neoliberalist" economic model to a "neostatist" one, both characterized by high levels of public spending, indebtedness and deficits and inflation in successive economic crises that affected the economic growth of the Gross Domestic Product with stagnation and undesirable macroeconomic imbalances. In this understanding, a theoretical review of how the different economic schools interpret the relationship of variables with growth is complemented. In the analytical part, the evolution of the macroeconomic variables mentioned in Bolivia and their link with the behavior of GDP is studied, paying special attention to critical and cyclical periods such as the economic and financial crisis, the pandemic crisis and the dollar crisis of a time series sample from 1986 to 2025. Thus, the objective is to understand to what extent inflation, public spending, state debt and the fiscal and trade balance condition the evolution of the Gross Domestic Product (GDP), the latter being our dependent variable, each of these variables are contemplated in its General State Budget. To analyze these data, we will first carry out a historical investigation of each of the study variables individually and of the entire sample, where we were able to identify cyclical patterns and complex curves with increasing and decreasing trends and to be able to compare which of the variables is more accurate. Subsequently, we developed a multiple correlation regression, the results obtained show a multiple correlation coefficient of 79%.
Author: César Daniel Vargas Díaz1* , Hernán Delgadillo Dorado2 , María Elena Dueri Méndez3
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7093332944
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