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Notes on the underground: monetary policy in resource-rich economies

Abstract:

The central bank of a commodity‐exporting small open economy faces the traditional trade‐off between domestic inflation and output gap. The commodity sector introduces a terms‐of‐trade inefficiency that gives rise to an endogenous cost‐push shock, changes the target level for output, reduces the slope of the Phillips curve, and increases the importance of stabilizing the output gap. Optimal monetary policy calls for a reduction of the interest rate following a drop in the oil price. In contra...

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Publication status:
Published
Peer review status:
Peer reviewed

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Publisher copy:
10.1111/jmcb.12556

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Institution:
University of Oxford
Division:
SSD
Department:
Economics
Oxford college:
Trinity College
Role:
Depositor, Author
Publisher:
Wiley Publisher's website
Journal:
Journal of Money, Credit and Banking Journal website
Volume:
51
Issue:
4
Pages:
953-976
Publication date:
2018-10-21
Acceptance date:
2018-06-05
DOI:
EISSN:
1538-4616
ISSN:
0022-2879
Pubs id:
pubs:855765
UUID:
uuid:9971ac34-b74b-424a-916f-aa2e78b67093
Source identifiers:
855765
Local pid:
pubs:855765
Language:
English
Keywords:

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