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Title: |
Resource Shocks, Real Exchange Rate
Appreciation and the Independence of Monetary Policy in Developing
Oil-Exporting Countries |
| Author: |
Nyatepe-Coo,
Akorlie A. |
| Author
Affiliation: |
U WI, La Crosse |
| Source: |
International Economic Journal, Winter 1995, v. 9, no. 4, pp. 91-107 |
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Publication Date: |
Winter 1995 |
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Abstract: |
This paper examines the objectives of
monetary policy in four developing oil-exporting countries (DOECs), and
the effects of the oil shocks on monetary control. A macroeconomic model
is developed to analyze the relationships between domestic credit, the
real exchange rate, and the balance of payments. The results show that
efforts were made to sterilize foreign reserves, but the independence of
monetary policy was compromised in some countries by monetized budget
deficits and real exchange rate overvaluation. Variance decompositions
from a VAR model affirm the role of the real exchagne rate in balance of
payments disequilibrium. |
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