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SSRN Electronic Journal
Article . 2009 . Peer-reviewed
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Bolivia’s Fiscal Rules: Dynamic Stochastic General Equilibrium Model Approach

Authors: Daney, Valdivia; Marcelo, Montenegro;

Bolivia’s Fiscal Rules: Dynamic Stochastic General Equilibrium Model Approach

Abstract

Changes in fiscal revenues in Bolivia allow us to assess its impact on the fiscal budget and spending policy. Based on a Dynamic Stochastic General Equilibrium Model (DSGE) using stylized facts for small open economy, we’re looking for a simulation of fundamentals’ responses or effects against different fiscal rules applied. In these sense we use two rules: first, where taxes adjust according to the debt level and government expenditures; and second, balanced budget where taxes adjust every time in order to maintain the equilibrium in budget. Our results show that after the fiscal shock hits the economy, the first fiscal rule has mayor stabilization effects on the price level than the second one, around 50%.

Keywords

Government expenditure, fiscal rule, pass - through, rule - of – thumb households, jel: jel:E62, jel: jel:E32

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
0
Average
Average
Average
bronze