Profundización financiera y crecimiento económico en Bolivia

Abstract

By any account the rate of growth of the Bolivian economy has been very low, even for Latin American standards. With this background the paper examines the contribution of the financial sector to the growth rate. Which are the characteristics of the financial sector that could have been supportive of growth and which are the constraints that appeared? A critical constraint to investment and growth is of course financing, its availability and frequently its high cost. Investment and capital accumulation do not depend only on increasing domestic saving rates or more foreign resources to development: they require financial intermediation. Intuition and previous studies done elsewhere show that there is a positive link between financial development and economic growth. Yet, some authors argue that not all forms of financial development affect growth positively and that financial structure matters. The thrust of the methodology to address these and related questions lies on the econometric estimation of growth equations that highlight the role of financial factors. In difference with most empirical studies on growth that are based on panel data the analysis in this paper consists of a thorough examination of the data of a single country.