The Transition from Stabilization to Sustained Growth in Bolivia

A major aim of the paper is to provide a thorough description of the post-stabilization macroeconomy as well as some indications of the unsolved problems. The maintenance of stabilization dominates the attention of Bolivian policy-makers. Other manifestations of macroeconomic disequilibrium, that may imperil price stability in the future, have received somewhat less recognition. In addition, the medium-term problems in the aftermath of stabilization have their own characteristics that need to be analyzed in some detail. They have to do with the tradeoffs between: domestic price stability, external competitiveness and level of economic activity; stability of the private financial system and macroeconomic stability; low inflation now and high revenues later. The most important medium-term problem, although not unrelated to the ones mentions above, is the establishment of attractive condition for the resurgence of private investment.