Central bank policy under significant balance-of-payment shocks and structural shifts

Andrey Sinyakov; Ksenia Yudaeva

doi:10.1016/j.ruje.2016.09.001

Research Article

Russian Journal of Economics 2(3): 246-278
https://doi.org/10.1016/j.ruje.2016.09.001 (31 Aug 2016)

Other versions:

Article title
Abstract
Keywords
1. Introduction
1. Theoretical description of the economy
- 1.1. Long-run equilibrium and the structure of the economy
  - 1.1.1. Economic equilibrium
  - 1.1.2. Structure of the economy
- 1.2. Structural transformation of the economy following changes in oil prices and the role of the real foreign exchange rate
  - 1.2.1. The real foreign exchange rate and its role in the economy
  - 1.2.2. Production capacity of the economy following changes in the foreign exchange rate
2. Equilibrium model, inflation and economic policy
- 2.1. Equilibrium in the goods and money markets (IS-MP model), equilibrium output and the equilibrium real interest rate
  - 2.1.1. Equilibrium in the goods market: the Investment-Savings (IS) line
  - 2.1.2. Equilibrium in the money market: the Monetary Policy (MP) line
- 2.2. Equilibrium in the foreign exchange market
- 2.3. Inflation, inflation expectations, and the relationship between inflation and GDP movements
- 2.4. Fiscal policy
3. Alternative monetary policy under balance of payment shocks
- 3.1. Maintaining the foreign exchange rate at the same level or gradual devaluation
- 3.2. Sterilized interventions to support the foreign exchange rate
- 3.3. Utilization of foreign exchange refinancing tools to address excessive stress in the foreign exchange market
- 3.4. Transition to a floating foreign exchange rate with anchored inflation expectations
- 3.5. Transition to a floating foreign exchange rate and a temporary increase in interest rates
- 3.6. Fiscal policy during an oil shock
4. Conclusions: The role of the monetary and fiscal policies during balance of payment shocks
Acknowledgements
References
Appendix