Adjustment and growth in a hyperinflation: The case of Bolivia

The main purpose of this paper is to examine the problems of external adjustment and of resumption of growth following the hyperinflation stabilization in Bolivia. The paper addresses a variety of questions concerning stabilization with liberalization, simultaneity in the liberalization of the current and capital accounts of the Balance-of-Payments, the costs of stabilization, the overhang of the hyperinflation in impeding economic recovery, and the possible conflicts between inflation stabilization and external adjustment. The discussion is entirely based in the Bolivian experience, but I believe that some of the conclusions may have a more general character.