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A first approach to the impact of the real exchange rate on industrial sectors in Colombia

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  • Sierra, Lya Paola
  • Manrique L., Karina

Abstract

Much has been said about possible symptoms of Dutch disease in Colombia in the wake of a marked upsurge in commodity prices and the significant real appreciation of the national currency. This paper examines whether the real effective exchange rate had an impact on industry during the period 2000-2010. Specifically, it evaluates the effect of the appreciation of the real exchange rate on the value added of 63 industrial sectors in Colombia using the Arellano and Bond (1991) generalized method of moments (gmm) estimator. Overall, our results confirm a negative relationship between real exchange rate appreciation and industry. The analysis showed that real exchange rate appreciation had a significant impact on the value added of 21 sectors: a negative effect for 18 sectors and a positive effect for 3 sectors.

Suggested Citation

  • Sierra, Lya Paola & Manrique L., Karina, 2014. "A first approach to the impact of the real exchange rate on industrial sectors in Colombia," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
  • Handle: RePEc:ecr:col070:37812
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    References listed on IDEAS

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    Keywords

    INESTABILIDAD MONETARIA; INDUSTRIA; DESARROLLO INDUSTRIAL; COMPETITIVIDAD; MODELOS ECONOMETRICOS; DATOS ESTADISTICOS; CONDICIONES ECONOMICAS; SISTEMAS MONETARIOS; RECURSOS FINANCIEROS; CURRENCY INSTABILITY; INDUSTRY; INDUSTRIAL DEVELOPMENT; COMPETITIVENESS; ECONOMETRIC MODELS; STATISTICAL DATA; MONETARY SYSTEMS; ECONOMIC CONDITIONS; FINANCIAL RESOURCES;

    JEL classification:

    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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