@article{Arguello:332849,
      recid = {332849},
      author = {Arguello, Ricardo},
      title = {The Plunge in Oil Prices: Sectoral and Employment Dynamics  in Colombia},
      address = {2017},
      year = {2017},
      note = {Presented at the 20th Annual Conference on Global Economic  Analysis, West Lafayette, IN, USA},
      abstract = {From the first half of the 2000s until 2012 the Colombian  economy was under the influence of an oil and mining  production and export boom that triggered the potential for  Dutch disease effects and led the government to implement  policies for facing them.  Concurrently with the phasing in  of the policy intervention, an abrupt fall in oil prices  ensued and the economy faced an important balance of  payments shock.  As a consequence it is relevant to ask  what the effects of the plunge in oil prices and of policy  intervention could be on sectoral and employment dynamics,  as the shock essentially reverses the process that the  economy was following until 2012 in a typical boom and  boost fashion.  For this, we use a recursive dynamic  computable general equilibrium model, calibrated to a 2011  Social Accounting Matrix of the Colombian economy, in which  activities are differentiated in terms of their formal and  informal components, and suitable details are included to  account for the stream of income the government receives  from the oil sector.  The model has a rich representation  of the labor market as it differentiates between the formal  and informal segments, allowing for unemployment in the  formal segment and limited migration of labor from the  formal to the informal segment.  We find that the oil price  plunge decreases the economy’s growth rate in a significant  manner and lowers demand for labor in general with a bias  against formal activities and skilled labor.  Furthermore,  we find that the policy intervention makes matters worse  and suggest that the government should consider temporarily  suspending operation of the policy or implementing  alternative policies that help prevent the relative  informalization of the labor market.},
      url = {http://ageconsearch.umn.edu/record/332849},
}