Nature of Oil Price Shocks and Monetary Policy

Junhee Lee () and Joonhyuk Song

No 15306, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We investigate the nature of oil price shocks to the Korean economy in recent years and find that the recent hike in oil price is induced by the increase in oil demand in contrast to the previous years when oil price run-up is mostly from supply disruptions. We also study how monetary responses to oil price shocks affect economic stability and find that an accommodative policy yields more stable outcomes.

JEL-codes: E32 E52 E58 (search for similar items in EconPapers)
Date: 2009-09
New Economics Papers: this item is included in nep-cba, nep-ene, nep-mac and nep-mon
Note: ME
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Citations: View citations in EconPapers (11)

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