Optimal simple monetary policy response to oil-price shocks in an oil-importing small open economy: The case of the Philippines
Clicks: 7
ID: 285828
2019
Article Quality & Performance Metrics
Overall Quality
Not rated
Combines reader engagement with the AI quality analysis. This
article has not been analysed, so there is no overall score —
reader engagement is measured and shown alongside.
Reader Engagement
Popular Article
1.8
/100
7 views
3 readers
AI Quality Assessment
Not analyzed
Readership in this journal
PopularRanked #1,575 of 3,757 articles by views in Malay Journal
Most read
Least read
Bar heights use a square-root scale. Only the 120 most-read articles are drawn; the journal has 3,757 in total.
Mint this article as an NFT
Not yet mintedCreate a permanent, verifiable on-chain record of this article on the Scimatic Network. The NFT is held in your Journament account, and you can withdraw it to your own wallet at any time.
5
SUSD
one-off · no wallet required
Abstract
Many small economies are reliant on imported oil for economic activities. Hence, these economies are susceptible to the recessive effects of oil price shocks, particularly positive shocks. The analyses on optimal monetary policy in the face of unanticipated changes in real oil prices have so far been limited to models characterizing close economies, large open economies, and small economies exporting oil. A dynamic stochastic general equilibrium (DSGE) model developed by An and Kang (2012) was calibrated to describe the Philippine economy and used to simulate the effects of an unanticipated increase in real oil price to the oil-importing, small open economy. To characterize the optimal monetary rule for the Bangko Sentral ng Pilipinas (BSP), a welfare loss criterion that is based on the disturbance in inflation rate, output growth and exchange rate was used. The results of the study show that a positive oil price shock causes a temporary contraction in the economy that is under a baseline monetary rule that targets headline inflation and output. The optimal monetary response in the context of the model subjected to an oil price shock is an interest rate rule that responds to disturbances in core inflation with a heavy emphasis on interest rate smoothing. The monetary policy conduct of the BSP in event of oil price shocks which was to control for second-round effects of the shock is aligned with the optimal rule found in the study.
| Reference Key |
persistent_1760656771_68f17d83e3094
Use this key to autocite in the manuscript while using
SciMatic Manuscript Manager or Thesis Manager
|
|---|---|
| Authors | Jola, Jessica Ann C. |
| Journal | Malay Journal |
| Year | 2019 |
| DOI |
DOI not found
|
| URL | |
| Keywords | Keywords not found |
Citations
No citations found. To add a citation, contact the admin at info@scimatic.org
Comments
No comments yet. Be the first to comment on this article.