Monetary Policy for a Resource-Rich Economy and the Zero Lower Bound
https://doi.org/10.18288/1994-5124-2022-3-44-73
Аннотация
The paper studies monetary policy (MP) under a zero lower bound (ZLB) on the basis of a DSGE model. The economy is open and highly dependent on the terms of trade (TOT). Dynamics are driven by a TOT shock and an external interest rate shock. The change in the transmission of these external shocks in the presence of ZLB is analyzed. Unlike developed economies, for resource-rich countries the ZLB problem becomes relevant during economic expansion when external economic conditions improve. Positive external shocks lead to strengthening of the national currency, a decrease in inflation and a decrease in interest rate under inflation targeting MP. The paper shows that, with an inflation target of 4% and no persistence in interest rates, a positive TOT shock of 1 standard deviation is sufficient to drive the economy into a ZLB. At the same time, if the economy faces ZLB, the impact of the shocks is reduced, since there is an increase in real interest rates, which restrains an increase in household consumption and, accordingly, aggregate demand. Optimal MP rules under the ZLB are analyzed. When conducting MP, it turns out to be optimal to maintain high inertia in interest rates and be less responsive to changes in inflation, which minimizes the likelihood of binding ZLB. Contrary to optimal MP rules, the current MP of the Bank of Russia, along with the inflation target of 4%, excludes the possibility of reaching the ZLB, but is far from the optimal degree of response to changes in inflation. It is also found that, under the current MP, the likelihood of reaching the effective lower bound (ELB) is quite significant.
При поддержке: The article was written on the basis of the RANEPA state assignment research program. The participation of a Bank of Russia employee in the RANEPA state assignment research program does not create a conflict of interest. Opinions expressed in the paper are solely those of the authors and may not reflect the official position of the affiliated institutions. The affiliated institutions bear no responsibility for the statements made in the paper.
Об авторах
M. Yu. Andreyev
Bank of Russia; Russian Presidential Academy of National Economy and Public Administration (RANEPA)
Россия
Россия
Mikhail Yu. Andreyev - Cand. Sci. (Phys. and Math.), Senior Economist; Senior Researcher
12 Neglinnaya ul., Moscow, 107016
82 Vernadskogo pr., Moscow, 119571
A. V. Polbin
Russian Presidential Academy of National Economy and Public Administration (RANEPA); Gaidar Institute for Economic Policy
Россия
Россия
Andrey V. Polbin - Cand. Sci. (Econ.), Head of the Center for Mathematical Modeling of Economic Processes; Head of the International Laboratory for Mathematical Modeling of Economic Processes
82 Vernadskogo pr., Moscow, 119571
3–5, Gazetnyy per., Moscow, 125009
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Рецензия
Для цитирования:
Andreyev M.Yu., Polbin A.V. Monetary Policy for a Resource-Rich Economy and the Zero Lower Bound. Экономическая политика. 2022;17(3):44-73. https://doi.org/10.18288/1994-5124-2022-3-44-73
For citation:
Andreyev M.Yu., Polbin A.V. Monetary Policy for a Resource-Rich Economy and the Zero Lower Bound. Economic Policy. 2022;17(3):44-73. https://doi.org/10.18288/1994-5124-2022-3-44-73
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