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Does Industrial Employment React to Movements in the Real Exchange Rate? An Empirical Analysis for Colombia, 2000-2010

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  • José Tomás Peláez S.
  • Lya Paola Sierra S.

Abstract

To determine the effect of the real exchange rate on Colombia’s industrial employment and 59 industrial sectors for the period 2000-2010, we used the generalized method of moments of Arellano and Bond (1991) and data from the Annual Manufacturing Survey of the National Administrative Department of Statistics (DANE). Our findings reveal that a real appreciation of the Colombian peso decreases the country’s manufacturing employment, and disaggregation by industrial sector shows that a real appreciation of the Colombian peso had a negative impact on manufacturing employment in 18 industrial sectors and a positive impact in seven.

Suggested Citation

  • José Tomás Peláez S. & Lya Paola Sierra S., 2016. "Does Industrial Employment React to Movements in the Real Exchange Rate? An Empirical Analysis for Colombia, 2000-2010," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 53(1), pages 39-60, December.
  • Handle: RePEc:ioe:cuadec:v:53:y:2016:i:1:p:39-60
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    Cited by:

    1. Oviedo Gómez, Andrés Felipe & Sierra, Lya Paola, 2019. "The importance of terms of trade in the Colombian economy," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    2. Lina Cardona-Sosa & Fredy Gamboa-Estrada & Jesahel Higuera-Barajas, 2019. "Cheap employment: ¿Aumenta el empleo manufacturero con una depreciación real?," Borradores de Economia 1062, Banco de la Republica de Colombia.
    3. Oviedo Gómez, Andrés Felipe & Sierra, Lya Paola, 2019. "Importancia de los términos de intercambio en la economía colombiana," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.

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    More about this item

    Keywords

    real exchange rate; industrial employment; Colombia;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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