Oil Prices and the Complexity of the Export Basket
the Paradox of the Colombian Case
Abstract
The objective of this article is to establish the effect of the fall in oil prices related to the complexity or technological intensity of the Colombian export basket, especially in industrial exports. To achieve this, three quantitative analyses were developed: i) a descriptive analysis through the Social Accounting Matrix, ii) the estimation of the impulse-response function of a structural VAR model between the exchange rate and industrial exports and iii) the calculation of the PRODY and EXPY indicators as an approximation to assess the change in the complexity of the Colombian export basket. The results found, indicate that the fall in oil prices around the world negatively affects —contrary to economic intuition — the complexity of the domestic export basket, since the Colombian production apparatus is highly dependent on capital goods imports and intermediate consumption for the production of greater technological complexity manufactured goods. As a result of the depreciation of the Colombian peso against the U.S. dollar, imports were affected, which in turn had an impact on greater complexity goods exports.
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References
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