02526cas a2200337 a 4500 AALejournalIMF022500 230101c9999 xx r poo 0 0eng d 5.00 USD 9798400203053 1018-5941 BD-DhAAL BD-DhAAL Gonzalez, Andres. Fix vs. Float : Evaluating the Transition to a Sustainable Equilibrium in Bolivia / Andres Gonzalez, Etibar Jafarov, Diego Rodriguez Guzman, Chris Walker. Washington, D.C. : International Monetary Fund, 2022. 1 online resource (32 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Bolivia has achieved noteworthy success over the past 15 years in raising incomes, reducing poverty, and maintaining macroeconomic stability by deploying commodity revenues to finance transfers, public investment, and state-led development, using an exchange rate peg as a policy anchor. However, with the end of the commodity boom in 2014, fiscal deficits have grown and reserves have fallen. One route to restoring long-run sustainability would be to combine fiscal consolidation with a switch to a floating exchange rate. However, a preference for maintaining the peg could be accommodated with adjustments elsewhere in the policy framework. Employing a detailed dynamic stochastic general equilibrium model of the Bolivian economy, this study assesses the long-run sustainability and relative benefits of alternative policy combinations, and calculates optimal adjustment paths for the transition from the present situation to the steady state. It concludes that continued adherence to a fixed-rate regime, while not optimal, is feasible, if supported by a larger fiscal effort. Mode of access: Internet Current Account Adjustment imf Dynamic Analysis imf Optimization Techniques imf Programming Models imf Short-Term Capital Movements imf Jafarov, Etibar. Rodriguez Guzman, Diego. Walker, Chris. IMF Working Papers; Working Paper ; No. 2022/043 Full text available on IMF http://elibrary.imf.org/view/journals/001/2022/043/001.2022.issue-043-en.xml IMF e-Library