In recent years, Bolivia has accumulated a significant level of international reserves due to favorable external environment and the exchange rate regimen (crawling peg). In this context arises the question of: Which one is the optimal level of international reserves? According to the...

This paper studies the effects of real exchange rate depreciation in an economy with extreme liability dollarization using vector autoregression (VAR) methods. Bolivia's extreme liability dollarization makes it an interesting case for empirical testing of the contractionary-depreciations...