رژیم سیاست پولی بهینه برای تولید نفت کشورهای در حال توسعه: مفاهیم برای عراق پس از جنگ

This paper theoretically investigates optimal monetary policy regime for oil producing developing countries. We analyze credibility and reputation of the Central Bank and macroeconomic dynamics under alternative monetary policy regimes. We construct a detailed and realistic model that can be used to analyze macroecomic structure and expectation dynamics of an oil producing open economy. We take into account the asymmetric information between the public and the central bank and theoretically investigate how this asymmetric information impacts the real economy and the credibility of the central bank. The simulation results indicate that central bank achieves higher credibility and lower inflation under dollarization and higher output levels under currency board regime. The model constructed in this paper has many policy implications for oil producing open economies. Using the implications of the model, we make monetary policy regime recommendations for post-war Iraq.

Determining optimal monetary policy for oil producing developing economies is non-trivial since many external factors like oil prices and exchange rate should be taken into account and there is significant amount of asymmetric information between the Central Bank (CB) and the public. This paper theoretically investigates the following question: what is the optimal monetary policy regime for an oil producing developing economy considering the interplay of external factors, asymmetric information and expectational dynamics? We analyze and compare the theoretical implications of three alternative monetary policy regimes on inflation, output growth, expectations, credibility and reputation of the CB. As in Hanke and Sekerke (2003), we investigate the following monetary policy regime alternatives: independent central bank (discretionary and inflation targeting), currency board and dollarization. While theoretically investigating these alternatives, we take into account the following conditions: 1) Impact of exchange rate on the economy (through oil revenues) 2) lack of credibility of the CB 3) importance of oil in the economy 4) asymmetric information and expectation dynamics. We extend the control-theoretic model of Svensson and Woodford, 2004 and Faust and Svensson, 2001 with oil price and exchange rate dynamics. Also, we incorporate asymmetric information and hierarchical information structure as in Townsend (1983) into the model to investigate expectation dynamics of the CB and the private sector. Under asymmetric information, we consider the case that the CB has private information about future inflation, output and its inflation target.1 We solve and implement this model to investigate optimal monetary policy regime for the oil producing economy. We analyze macroeconomic dynamics, credibility and reputation of the CB under alternative monetary policy regimes. We construct a detailed and realistic model that can be used to analyze the macroeconomic structure and expectation dynamics of an oil producing open economy. There are five main results of this paper. First, theoretically we show that actions of the CB (interest rate and inflation target) significantly affect expectations of the public. The asymmetric information between the CB and the public partly causes that effect. Second, credibility of the CB under dollarization regime is significantly higher than credibility under alternative regimes.2 Third, under currency board regime the reputation of the CB is higher in the sense that the public expects the CB to accommodate higher output growth. Fourth, inflation is significantly lower when the CB adopts dollarization. Finally, output is higher under the currency board regime while the dollarization regime has the lowest level of output. This is caused by the fact that under dollarization the central bank does not have any power to impact the exchange rate. The only aim of the foreign central bank is to achieve lower inflation at its home country. Under the currency board regime the central bank targets the exchange rate and higher levels of oil revenues can be achieved. As a result, this paper has many important policy implications for oil producing developing economies. The theoretical results of the paper indicate that the CB should adopt dollarization if its main objective is to maintain higher credibility and lower inflation. But the currency board regime achieves higher levels of output through maintaining a certain level of exchange rate. The results of this paper make significant contributions to the ongoing debate about optimal monetary policy regime for post-war Iraq. There are several studies about optimal monetary policy regimes for oil producing countries. Hanke and Sekerke, 2003 and Roubini and Setser, 2003 analyze and make proposals about optimal monetary policy regime for post-war Iraq. All of these studies are empirical and do not conduct any theoretical investigations. Thus, this study is making several important contributions to the literature. First of all, this study provides an extensive theoretical study about optimal monetary policy for oil producing developing economies like post-war Iraq. Second, this study contributes to the discussion of pegging the currency to export price. We construct a model of signaling and learning as in Townsend (1983) to investigate the changes in the expectations of the public under currency board (peg the currency). This forward-looking model allows us to analyze changes in expected inflation and output under currency board regime. Frankel and Saiki, 2002, Frankel, 2005 and Setser, 2007 indicate that pegging to export price might be a better option and is robust to terms of trade shocks. Frankel (2003) analyzes the case of Iraq and propose that Iraq should include oil to the basket of currencies to which the dinar is to be pegged. All of these studies are empirical. We model the arguments in these studies and theoretically investigate the implications of previous empirical studies. Third, this study theoretically investigates the credibility of the CB and expectations of the public under alternative monetary policy regimes. Finally, theoretical analysis is provided to the ongoing debate about optimal monetary policy regime for post-war Iraq. The rest of the paper is organized as follows: Section 2 explains the fundamental elements of the model of asymmetric information and learning. Section 3 solves the model to determine the expectation dynamics under alternative monetary policy regimes. Section 4 investigates reputation and credibility of the central bank under alternative monetary policy regimes. 5 and 6 explain the calibration of the model and conduct simulations to present the findings of the model. Section 7 makes policy recommendations for post-war Iraq using the theoretical findings of the paper and Section 8 concludes.

We construct a detailed and realistic model of macroeconomic structure and expectation (learning) dynamics for oil producing developing economies to investigate optimal monetary policy regime. We analyze and compare the theoretical implications of three alternative monetary policy regimes on inflation, output growth, expectations, credibility and reputation of the central bank. The analyzed monetary policy alternatives are: an independent central bank with and without inflation targeting, a currency board and dollarization. The simulation results indicate that the dollarization regime achieves higher central bank credibility and lower inflation. A currency board regime maintains higher output levels because of the importance of oil exports in the GDP. An independent central bank regime with and without inflation targeting does not achieve any favorable results. This paper provides theoretical analysis and results for the search of optimal monetary policy regime for oil producing developing economies like post-war Iraq. We provide theoretical support for the previous empirical findings in the literature. We find that one should take into account the trade-off between high credibility–low inflation and high output while searching for optimal monetary policy regimes for oil producing countries.