External Shocks and Monetary Policy in an Oil Exporting Economy

Jean-Pierre Allegret () and Mohamed Benkhodja
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Jean-Pierre Allegret: EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique

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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.

Keywords: Monetary policy; external shocks; oil exporting economy; Algeria; DSGE model (search for similar items in EconPapers)
Date: 2015
Note: View the original document on HAL open archive server: https://hal.parisnanterre.fr/hal-01385986
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Citations: View citations in EconPapers (27)

Published in Journal of Policy Modeling, 2015, 37 (4), pp.652- 667. ⟨10.1016/j.jpolmod.2015.03.017⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01385986

DOI: 10.1016/j.jpolmod.2015.03.017

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