Oil Price Shocks and Currency Denomination

Hans-Werner Wohltmann and Roland Winkler ()

No 2005-10, Economics Working Papers from Christian-Albrechts-University of Kiel, Department of Economics

Abstract: The paper analyzes the dynamic effects of anticipated price increases of imported raw materials upon two large open economies. It is assumed that the economies have an asymmetric macroeconomic structure on the supply side and are dependent upon a small third country for oil or raw materials imports. The dynamic behavior of several macroeconomic variables is discussed both under US dollar and Euro-currency denomination. It is shown that with Euro-currency denominated oil the stagnationary effects of oil price increases upon both the domestic and foreign economy are reduced. The paper also discusses several monetary policy responses to oil price shocks.

Keywords: oil price shocks; international policy coordination; currency denomination (search for similar items in EconPapers)
JEL-codes: E63 F42 Q43 (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-ene, nep-fmk and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cauewp:3196

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