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Monetary policy and the effect of the transfer of oil prices to inflation
https://doi.org/10.32609/0042-8736-2020-8-41-50
Abstract
The paper examines the impact of oil price shocks on inflation, as well as the impact of the choice of the monetary policy regime on the strength of this influence. We used dynamic models on panel data for the countries of the world for the period from 2000 to 2017. It is shown that mainly the impact of changes in oil prices on inflation is carried out through the channel of exchange rate. The paper demonstrates the influence of the transition to inflation targeting on the nature of the relationship between oil price shocks and inflation. This effect is asymmetrical: during periods of rising oil prices, inflation targeting reduces the effect of the transfer of oil prices, limiting negative effects of shock. During periods of decline in oil prices, this monetary policy regime, in contrast, contributes to a stronger transfer, helping to reduce inflation.
Supporting agencies: The reported study was funded by MGIMO University, project number 1921-01-02
About the Authors
Ph. S. Kartaev
Lomonosov Moscow State University; MGIMO University
Russian Federation
Russian Federation
Philipp S. Kartaev
Moscow
I. D. Medvedev
Lomonosov Moscow State University
Russian Federation
Russian Federation
Ilya D. Medvedev
Moscow
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For citations:
Kartaev P.S., Medvedev I.D. Monetary policy and the effect of the transfer of oil prices to inflation. Voprosy Ekonomiki. 2020;(8):41-50. (In Russ.) https://doi.org/10.32609/0042-8736-2020-8-41-50
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