International macroeconomic interdependence and imports of oil in a small open economy

Detalhes bibliográficos
Autor(a) principal: Sousa, Teresa
Data de Publicação: 2011
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: http://hdl.handle.net/10400.5/15657
Resumo: To the extent that oil imports may be relevant to the international dimension of policy, we study the transmission of shocks to open economies dependent on oil within a NOEM framework through a DSGE model of a small open economy with flexible prices, staggered price setting and local currency pricing. For this purpose we introduce imports of oil as a new intermediate good needed to produce the final good and, apart from the usual exogenous shocks when a small open economy is being modeled, we consider an uncovered interest-rate parity shock, a technology shock and an oil price shock. A second-order accurate solution method is used to solve numerically a calibrated model for Portugal and Spain and the simulation results are compared with historical data, showing similar volatilities and expected dynamic responses to exogenous shocks. The model is computed with an optimized Taylor-style interest rate rule that includes real exchange targeting, thus arguing in favour of an international dimension of monetary policy.
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spelling International macroeconomic interdependence and imports of oil in a small open economyInterest rate rulesInternational transmission mechanismNew Open Economy MacroeconomicsOil pricesTo the extent that oil imports may be relevant to the international dimension of policy, we study the transmission of shocks to open economies dependent on oil within a NOEM framework through a DSGE model of a small open economy with flexible prices, staggered price setting and local currency pricing. For this purpose we introduce imports of oil as a new intermediate good needed to produce the final good and, apart from the usual exogenous shocks when a small open economy is being modeled, we consider an uncovered interest-rate parity shock, a technology shock and an oil price shock. A second-order accurate solution method is used to solve numerically a calibrated model for Portugal and Spain and the simulation results are compared with historical data, showing similar volatilities and expected dynamic responses to exogenous shocks. The model is computed with an optimized Taylor-style interest rate rule that includes real exchange targeting, thus arguing in favour of an international dimension of monetary policy.Springer VerlagRepositório da Universidade de LisboaSousa, Teresa2018-06-20T09:58:49Z2011-042011-04-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.5/15657engSousa, Teresa (2011). "International macroeconomic interdependence and imports of oil in a small open economy". Portuguese Economic Journal, 10(1):35-601617-982X (print)10.1007/s10258-010-0068-2metadata only accessinfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-03-12T01:30:56Zoai:www.repository.utl.pt:10400.5/15657Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T17:01:16.909723Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv International macroeconomic interdependence and imports of oil in a small open economy
title International macroeconomic interdependence and imports of oil in a small open economy
spellingShingle International macroeconomic interdependence and imports of oil in a small open economy
Sousa, Teresa
Interest rate rules
International transmission mechanism
New Open Economy Macroeconomics
Oil prices
title_short International macroeconomic interdependence and imports of oil in a small open economy
title_full International macroeconomic interdependence and imports of oil in a small open economy
title_fullStr International macroeconomic interdependence and imports of oil in a small open economy
title_full_unstemmed International macroeconomic interdependence and imports of oil in a small open economy
title_sort International macroeconomic interdependence and imports of oil in a small open economy
author Sousa, Teresa
author_facet Sousa, Teresa
author_role author
dc.contributor.none.fl_str_mv Repositório da Universidade de Lisboa
dc.contributor.author.fl_str_mv Sousa, Teresa
dc.subject.por.fl_str_mv Interest rate rules
International transmission mechanism
New Open Economy Macroeconomics
Oil prices
topic Interest rate rules
International transmission mechanism
New Open Economy Macroeconomics
Oil prices
description To the extent that oil imports may be relevant to the international dimension of policy, we study the transmission of shocks to open economies dependent on oil within a NOEM framework through a DSGE model of a small open economy with flexible prices, staggered price setting and local currency pricing. For this purpose we introduce imports of oil as a new intermediate good needed to produce the final good and, apart from the usual exogenous shocks when a small open economy is being modeled, we consider an uncovered interest-rate parity shock, a technology shock and an oil price shock. A second-order accurate solution method is used to solve numerically a calibrated model for Portugal and Spain and the simulation results are compared with historical data, showing similar volatilities and expected dynamic responses to exogenous shocks. The model is computed with an optimized Taylor-style interest rate rule that includes real exchange targeting, thus arguing in favour of an international dimension of monetary policy.
publishDate 2011
dc.date.none.fl_str_mv 2011-04
2011-04-01T00:00:00Z
2018-06-20T09:58:49Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv http://hdl.handle.net/10400.5/15657
url http://hdl.handle.net/10400.5/15657
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv Sousa, Teresa (2011). "International macroeconomic interdependence and imports of oil in a small open economy". Portuguese Economic Journal, 10(1):35-60
1617-982X (print)
10.1007/s10258-010-0068-2
dc.rights.driver.fl_str_mv metadata only access
info:eu-repo/semantics/openAccess
rights_invalid_str_mv metadata only access
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Springer Verlag
publisher.none.fl_str_mv Springer Verlag
dc.source.none.fl_str_mv reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron:RCAAP
instname_str Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron_str RCAAP
institution RCAAP
reponame_str Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
collection Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
repository.name.fl_str_mv Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
repository.mail.fl_str_mv
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