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Inflation Targeting And Dollarization In Bolivia, Hugo Vaca Pereira Rocha

Economics Undergraduate Honors Theses

This thesis attempts to test the effectiveness of the IT regime as a nominal anchor (reference for monetary policy) to the Bolivian Central Bank through the use of the Taylor rule. In order to use the Taylor Rule, it will be necessary to collect data from the monetary aggregates, interest rates (preferably US interest rates since the boliviano is pegged to the US dollar), and Bolivian Central Bank international reserves. Depending upon the results of the coefficients found it would be possible to make some initial conclusions. The reason why this amount of data will be required is that this …