Comment on “Trade integration in Colombia: A dynamic general equilibrium study with new exporter dynamics” by George Alessandria and Oscar Avila

Abstract

© 2020 This paper provides a series of comments aimed mainly at addressing the empirical relevance of the proposed interpretation of the mechanism and partly at considering the possible interaction between the trade and labor market reforms that took place in Colombia in the same period. In particular, it first highlights the stylized facts about Colombian exports and exporters that the model aims to theoretically reconcile and I briefly summarize the mechanism proposed in the microeconomic block of the theory. Next, it focuses on two crucial assumptions made in the model; it proposes a complementary way of presenting the mechanism and proposes ways to evaluate the empirical relevance on the competing interpretations. Finally, it focuses on the broader economic and institutional background characterizing Colombia in the early Nineties and highlights the possibility that other reforms taking place in the same years may have interacted with trade liberalization in shaping firms' distribution and export dynamics as well as welfare.