Optimal monetary policy response to endogenous oil price fluctuations

Arbeitspapier

Should the central bank seek to identify the underlying causes of oil price hikes in determining appropriate policy responses to them? Most likely not. Within a calibrated new-Keynesian model of Oil-Importing and Oil-Producing Countries, I derive the Ramsey policy and analyze optimal monetary policy responses to different sources of oil price fluctuations. I find that oil-specific demand and supply shocks call for similar policy responses, given the low substitutability of oil in production and the incompleteness of international asset markets.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: NBB Working Paper ; No. 277

Classification and Topics

• Classification: Wirtschaft ; Monetary Policy ; Policy Objectives; Policy Designs and Consistency; Policy Coordination ; Energy and the Macroeconomy
• Subject: Oil Prices ; Optimal Monetary Policy ; Ramsey Approach ; Welfare Analysis ; Ölpreis ; Schock ; Geldpolitik ; Wohlfahrtsanalyse

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Stevens, Arnoud
• Event: Veröffentlichung
• (who): National Bank of Belgium
• (where): Brussels
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/144489
• Last update: 04.03.2025, 11:44 AM CET