Business Cycle with Bank Intermediation in Oil Economies

Hamid Tabarraei, Hamed Ghiaie and Asghar Shahmoradi ()

No 2018/999, IMF Working Papers from International Monetary Fund

Abstract: The structural model in this paper proposes a micro-founded framework that incorporates an active banking sector with an oil-producing sector. The primary goal of adding a banking sector is to examine the role of an interbank market on shocks, introduce a national development fund and study its link to the banking sector and the government. The government and the national development fund directly play key roles in the propagation of the oil shock. In contrast, the banking sector and the labor market, through perfect substitution between the oil and non-oil sectors, have major indirect impacts in spreading shocks.

Keywords: WP; central bank; development fund; interest rate; Oil-exporting countries; Banking; Oil-Reserve Fund; DSGE; adjustment cost; oil price shock; oil revenue; lending branch; central bank lending; cost of capital; oil firm; oil price volatility; capital stock stock-building; Oil sector; Oil prices; Oil; gas and mining taxes; Global; oil economy; market clearing (search for similar items in EconPapers)
Pages: 38
Date: 2018-10-02
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