Resumen:
This paper uses a CES function to estimate the constant elasticity of substitution
in consumption for non-tradables relative to tradables in a dependent economy
framework. The methodology for generating data on real consumption of tradable
and non-tradable goods, real prices of tradable and non-tradable goods and real
absorption is based on the Bolivian Input-Output Matrix, producing quarterly data
for the period 1990.1 to 2002.4. The data identify Bolivia as a country highly
open to trade, with an average ratio of 55 percent in the value of exports and
imports relative to GDP, non-tradable production accounting for 52 percent of
GDP, and differences in the behavior of the internal and external real exchange
rates. The HEGY test is used to identify and separate out seasonal unit roots in the
data. A cointegration relationship was found between real absorption, the nontradable to tradable consumption ratio and the non-tradable to tradable price ratio,
suggesting inelasticity of substitution.
