05464oam 22011654 450 991078834870332120230721045634.01-4623-9512-01-4527-1778-897866128431671-4518-7248-81-282-84316-8(CKB)3170000000055184(EBL)1608142(SSID)ssj0000940714(PQKBManifestationID)11528525(PQKBTitleCode)TC0000940714(PQKBWorkID)10956001(PQKB)10898361(OCoLC)680613543(MiAaPQ)EBC1608142(IMF)WPIEE2009101(EXLCZ)99317000000005518420020129d2009 uf 0engur|n|---|||||txtccr“What Should Inflation Targeting Countries Do When Oil Prices Rise and Drop Fast?” /Nicoletta Batini, Eugen TereanuWashington, D.C. :International Monetary Fund,2009.1 online resource (34 p.)IMF Working PapersDescription based upon print version of record.1-4519-1678-7 Includes bibliographical references.Contents; I. Introduction; Tables; 1. Oil Price Developments; II. Relevant Literature; III. Methodology, Data and Calibration; IV. Optimal Policy Responses and Optimal Horizons to a 2000s-Type Supply Shock; A. Optimal Policy Responses under a 2000s-Type Oil Shock; 2. Welfare Statistics-Various Oil Regimes; B. Optimal Horizons for a 2000s-Type Oil Shock; 3. Optimal Policy Horizons Under Alternative Oil Regimes; 4. Optimal Policy Horizons Under Alternative Oil Regimes (α = 0.3); V. Optimal Rules Under Imperfect Credibility; 5. Optimal Feedback Horizons Under Alternative Oil RegimesVI. Bracing for Future ShocksVII. Concluding Remarks and Policy Implimentations; 6. Optimized Feedback Coefficients Under Three Alternative Future Oil Scenarios; ReferencesAfter a long period of global price stability, in 2008 inflation increased sharply following unprecedented increases in the price of oil and other commodities, notably food. Although inflation remained lower and growth higher in inflation targeting countries than elsewhere, almost everywhere price stability seemed in jeopardy as consumer prices kept surging and central banks struggled to maintain expectations anchored. The rapid drop in energy and food prices that later accompanied the world slowdown helped avert the worse, but inflation stayed high in many inflation targeting countries. This paper uses a small open-economy DSGE model to design the correct monetary policy response to a protracted supply shock of the kind observed today, and explains how to choose optimal policy horizons under such shock. Using a version of the model with Kalman learning, the paper also evaluates the implications of a loss of target credibility, showing how rules must be adjusted when the authorities' commitment to low inflation has been eroded. The appropriate response to future evolutions of the price of oil, including to a large downward correction as recently observed, is also evaluated.IMF Working Papers; Working Paper ;No. 2009/101Petroleum productsPricesInflation (Finance)Banks and BankingimfInvestments: EnergyimfInflationimfMacroeconomicsimfMoney and Monetary PolicyimfPrice LevelimfDeflationimfEnergy: Demand and SupplyimfPricesimfEnergy: GeneralimfMonetary PolicyimfBanksimfDepository InstitutionsimfMicro Finance InstitutionsimfMortgagesimfInvestment & securitiesimfMonetary economicsimfBankingimfOil pricesimfOilimfInflation targetingimfPetroleum industry and tradeimfMonetary policyimfBanks and bankingimfUnited StatesimfPetroleum productsPrices.Inflation (Finance)Banks and BankingInvestments: EnergyInflationMacroeconomicsMoney and Monetary PolicyPrice LevelDeflationEnergy: Demand and SupplyPricesEnergy: GeneralMonetary PolicyBanksDepository InstitutionsMicro Finance InstitutionsMortgagesInvestment & securitiesMonetary economicsBankingOil pricesOilInflation targetingPetroleum industry and tradeMonetary policyBanks and bankingBatini Nicoletta1491223Tereanu Eugen1493528DcWaIMFBOOK9910788348703321“What Should Inflation Targeting Countries Do When Oil Prices Rise and Drop Fast?”3716538UNINA