The Approach of this Book to the Study of External Shocks and Policy Analysis

Abstract

As explained in the introduction, this book argues that adjustment to external shocks, in a less developed country like Bolivia, crucially depends on the institutional features that determine the macroeconomic functioning of the country, as well as on the socioeconomic structure that determines the direction of adjustment. This chapter analyses how these institutional settings, that are particular to the functioning of the Bolivian economy, have determined macroeconomic adjustment to external shocks in the country over the last two and a half decades.