Monetary Policy Dynamics in Large Oil-Dependent Economies

Hans-Werner Wohltmann and Roland Winkler ()

No 2005-17, Economics Working Papers from Christian-Albrechts-University of Kiel, Department of Economics

Abstract: The paper analyzes the impacts of anticipated and unanticipated monetary policies on two large open economies that are dependent upon raw materials imports from a small third country. The analysis is based on asymmetric behavior on the supply side of both economies and an endogenous commodity pricing equation of Phillips' curve type. It is shown that an increase in the growth rate of domestic money supply is not neutral in the long run but induces contractionary output effects in both economies. The paper also discusses the impacts of monetary policy rules that either reduce the inflationary or contractionary output effects of commodity price shocks.

Keywords: Monetary Policy; Oil Price Shocks; International Policy Coordination (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-cba, nep-ene, nep-fdg, nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cauewp:3834

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