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Monetary and Credit Policy Options for an Oil Exporting Country

Author

Listed:
  • Sergey Drobyshevsky

    (Gaidar Institute for Economic Policy)

  • A. Kozlovskaya
  • Pavel Trunin

    (Gaidar Institute for Economic Policy)

Abstract

The paper deals with an analysis of efficacy of monetary and credit policy in the major oil_exporting economies from the perspective of sterilization of shocks caused by money offer generated by fluctuations of export revenues fueld by oil price fluctuation on the global market. Basing on methods of evaluation of multivariate time series, the first section of the paper tests a hypothesis of efficiency of a monetary and credit policy in oil exporting economies under external price shocks. The second section presents a macroeconomic model of of general equilibrium with money in the usefulness function, which describes a small open economy that exports mineral goods the prices for which are exogenously set on the world market. Basing on results and conclusions contained in both sections, the authors formulate a series of recommendations on selecting the CBR's monetary and credit policy under high/low oil prices.

Suggested Citation

  • Sergey Drobyshevsky & A. Kozlovskaya & Pavel Trunin, . "Monetary and Credit Policy Options for an Oil Exporting Country," Research Paper Series, Gaidar Institute for Economic Policy.
  • Handle: RePEc:gai:rpaper:121
    as

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    File URL: http://www.iep.ru/files/RePEc/gai/rpaper/121Drobyshevsky.pdf
    File Function: Revised version, 2013
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    References listed on IDEAS

    as
    1. Blanchard, Olivier J, 1981. "Output, the Stock Market, and Interest Rates," American Economic Review, American Economic Association, vol. 71(1), pages 132-143, March.
    2. Maurice Obstfeld & Kenneth S. Rogoff, 1996. "Foundations of International Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262150476, January.
    3. Obstfeld, Maurice & Rogoff, Kenneth, 2000. "New directions for stochastic open economy models," Journal of International Economics, Elsevier, vol. 50(1), pages 117-153, February.
    4. Carl E. Walsh, 2003. "Monetary Theory and Policy, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232316, January.
    5. Ang, Andrew & Bekaert, Geert, 2002. "Regime Switches in Interest Rates," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(2), pages 163-182, April.
    6. Michael B. Devereux & Charles Engel, 2003. "Monetary Policy in the Open Economy Revisited: Price Setting and Exchange-Rate Flexibility," Review of Economic Studies, Oxford University Press, vol. 70(4), pages 765-783.
    7. Lucas, Robert E, Jr & Stokey, Nancy L, 1987. "Money and Interest in a Cash-in-Advance Economy," Econometrica, Econometric Society, vol. 55(3), pages 491-513, May.
    8. Olivier Jean Blanchard & Stanley Fischer, 1989. "Lectures on Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262022834, January.
    9. Hamilton, James D, 1983. "Oil and the Macroeconomy since World War II," Journal of Political Economy, University of Chicago Press, vol. 91(2), pages 228-248, April.
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    11. Kamas, Linda, 1986. "The Balance of Payments Offset to Monetary Policy: Monetarist, Portfolio Balance, and Keynesian Estimates for Mexico and Venezuela," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 18(4), pages 467-481, November.
    12. Paul Krugman, 1983. "Oil Shocks and Exchange Rate Dynamics," NBER Chapters,in: Exchange Rates and International Macroeconomics, pages 259-284 National Bureau of Economic Research, Inc.
    13. Favero, Carlo A., 2001. "Applied Macroeconometrics," OUP Catalogue, Oxford University Press, number 9780198296850.
    14. Michael Dotsey & Max Reid, 1992. "Oil shocks, monetary policy, and economic activity," Economic Review, Federal Reserve Bank of Richmond, issue Jul, pages 14-27.
    15. P N Snowden & M A Salisu & N Taher, 2000. "Oiling the wheels: credit and monetary neutrality in Saudi Arabia," Working Papers 539748, Lancaster University Management School, Economics Department.
    16. Anne K. McGuirk, 1983. "Oil Price Changes and Real Exchange Rate Movements among Industrial Countries (Variations de prix du pétrole et mouvements du taux de change réel entre les pays industriels) (Las variaciones del pre," IMF Staff Papers, Palgrave Macmillan, vol. 30(4), pages 843-884, December.
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    More about this item

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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