Can aggregate demand policies bring about economic growth in the long term? What is the impact of a better resource distribution on long-term economic growth in Bolivia? These questions are analyzed within the framework of a Kaleckian model of economic growth to make an empirical study of the relationships between the aggregate demand, distribution and growth. For estimating the structural behavior equations of the prevailing regimes in the Bolivian economy, Bayesian methods were used. The conclusions are that the Bolivian economy displays a wage-led demand regime and an overall contractive regime in the profit share (i.e. when the benefits in the profit share increase, economic growth goes down), and therefore a better resource distribution. When the aggregate demand increases, long-term economic growth will be greater. The results show that a decrease of 1% in the profit share, which increases the annual wage of the workers by approximately BOB 268.4, will lead to an annual aggregate output increase of 0,57%.
A Bayesian Estimation of the Kaleckian Model of Growth in Bolivia, 1990-2015
Fecha de Publicación
Autores
Luis Alberto Arce Catacora, David Quiroz Sillo and José Alberto Villegas Gómez
Referencia
BOLIVIAN ECONOMIC RESEARCH PAPERS Vol. 1(2), 2016 July