CEU Electronic Theses and Dissertations, 2011
| Author | Konorev, Alexey |
|---|---|
| Title | Dutch Disease and Monetary Policy in an Oil-Exporting Economy: the Case of Russia |
| Summary | In this work I broadly investigated the phenomenon of Dutch Disease. I found empirical evidence of vulnerability to DD of Russian economy. The symptoms are: real exchange rate appreciation caused by oil windfall, higher services growth, slower manufacturing growth and overall wages increase. However, these may be caused by other processes taking place in the economy, such as transition. Also I built a DSGE model of the economy sick with Dutch Disease in order to investigate impact of oil price shocks on such economy. In this work I concentrated mostly on incomplete asset market case, since it turned out that agents can totally hedge themselves from stochastic shocks of oil price under complete markets case. Taken several specifications of welfare function I ranked types of monetary policies based on their contribution to welfare loss. It turned out that targeting domestic inflation with Taylor-based rule (DITR) produces poor results. Meanwhile, CPI inflation targeting and exchange rate peg were found optimal under different specifications. Then two extensions were carried out: I introduce stabilization fund and assume that tradable-producing firms have exposure to oil price fluctuation. Overall, the best performance with respect to welfare loss demonstrates CPI inflation targeting as consistent with findings of Sosunov and Zamulin (2007). |
| Supervisor | Campolmi Alessia |
| Department | Economics MA |
| Full text | https://www.etd.ceu.edu/2011/konorev_alexey.pdf |
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