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Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute

Economics and Business

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ISSN 2775-9237 (Online)

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
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Published: 10 August 2022

Monetary Policy Responses to Crude Oil-Price Shocks: The Case of Selected Central Banks

Austin Mwange, Ayanda Meyiwa

ZCAS University (Zambia), University of Kwa Zulu Natal (South Africa)

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, management journal

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doi

10.31014/aior.1992.05.03.440

Pages: 102-112

Keywords: Oil Price Shocks, Contractionary Monetary Policy, Expansionary Fiscal Policy, New Keynesian Model

Abstract

Since the establishment of Central Banks, they have been responsible for their national economic stabilization. This paper explores how selected banks have responded to oil price shocks. Firstly, the paper provides a critical analysis of the effects of commodity price shocks using a version of the three equations – the New Keynesian model. Secondly, the paper chronologically investigates past responses to shocks from five central banks, emphasizing similar and extreme responses and their success. Lastly, the paper utilizes the historical analysis to formulate a recommended response for central banks today. The major outcome of this study is the culmination of a recommendation that proactively implementing contractionary monetary policy alongside expansionary fiscal policy, using conventional and unconventional policies is the most effective.

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