Optimal Monetary Policy for Postwar Iraq - Economic Research Forum (ERF)

Optimal Monetary Policy for Postwar Iraq

Bedri Kamil Onur Tas and Selahattin Togay


Date:
May, 2009

NO.
488

Length:
16 pages

Publisher:
Economic Research Forum (ERF)

Topic:
E. Macroeconomics and Monetary Economics

Abstract
This paper theoretically investigates the optimal monetary policy regime for post-war Iraq. We analyze the macroeconomic dynamics (inflation, output and exchange rate) and the credibility and reputation of the Central Bank of Iraq (CBI) 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. The simulation results indicate that an independent central bank with inflation targeting achieves credibility and reputation. The model constructed in this paper can be used to investigate more oil producing open countries.

Arabic Abstract:

تبحث هذه الورقة نظريا النظام الأمثل للسياسة النقدية للعراق بعد الحرب. فنحلل الديناميكيات الاقتصادية الشاملة (المدخلات والمخرجات وأسعار الصرف)، وكذا مصداقية البنك المركزي العراقي وسمعته في ظل نظم بديلة للسياسة النقدية. ونشكل بذلك نموذجا تفصيليا واقعيا يمكن استخدامه في تحليل البنية الاقتصادية الشاملة والديناميكية المتوقعة بالنسبة للاقتصاد المفتوح لإنتاج البترول، وتشير نتائج المحاكاة إلى أن المصداقية والسمعة تكون من نصيب البنك المركزي المستقل الذي يهدف إلى المدخلات. كما يمكن استخدام النموذج المشار إليه في هذه الورقة لبحث الدول المفتوحة المنتجة للبترول.
Research Fellows

Bedri Kamil Onur Tas

Professor, TOBB University of Economics and Technology


Selahattin Togay


Project

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