Energy producers should lower interest rates following drop in oil prices, suggests Norges Bank paper
Given spillovers to rest of economy, optimal policy calls for a reduction in interest rates
"Optimal policy" calls for central banks in oil-rich countries to lower interest rates following a drop in global oil prices, according to a Norges Bank working paper.
Notes on the underground: monetary policy in resource-rich economies by Andrea Ferrero and Martin Seneca studies monetary policy in resource-rich economies to provide a "first answer" on how it should respond to a commodity price shock.
"The central bank faces a trade-off between the stabilisation of domestic inflation and an
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