Inflation volatility and economic growth in Bolivia: a regional analysis

摘要

This paper analyses the effects of inflation and its volatility on Gross Domestic Product (GDP) per capita for the regions of Bolivia over the period 1989-2011. Results show the existence of a positive relationship with inflation but a negative one with respect to volatility. Moreover, we identify a threshold for volatility and inflation. Our conclusions imply that economic agents are more tolerant to relatively high levels of inflation than to high inflation volatility.