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

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