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External Shocks and Monetary Policy in an Oil Exporting Economy

Author

Listed:
  • Jean-Pierre Allegret

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Mohamed Tahar Benkhodja

    (UL2 - Université Lumière - Lyon 2)

Abstract

To investigate the dynamic effect of external shocks on an oil exporting economy, we estimate, using Bayesian approach, a DSGE model based on the features of the Algerian economy. We analyze the impulse response functions of our external shocks according to alternative monetary rules. The welfare cost associated with each monetary policy rule is considered. We find that, over the period 1990–2010, core inflation monetary rule allows better to stabilize both output and inflation. This rule also appears to be the best way to improve a social welfare.

Suggested Citation

  • Jean-Pierre Allegret & Mohamed Tahar Benkhodja, 2015. "External Shocks and Monetary Policy in an Oil Exporting Economy," Post-Print hal-01385986, HAL.
    • Handle: RePEc:hal:journl:hal-01385986
    DOI: 10.1016/j.jpolmod.2015.03.017
    Note: View the original document on HAL open archive server: https://hal.parisnanterre.fr/hal-01385986v1
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    References listed on IDEAS

    as
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