Macroeconomic Impacts of Energy Price Shocks and Monetary Policy: An Estimated DSGE Model for Turkey

Macroeconomic Impacts of Energy Price Shocks and Monetary Policy: An Estimated DSGE Model for Turkey | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Macroeconomic Impacts of Energy Price Shocks and Monetary Policy: An Estimated DSGE Model for Turkey Ahmet Gökçe Akpolat This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-5056541/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This study examines the impact of energy price shocks and the role of monetary policy in the face of energy price shocks within a Bayesian DSGE model over the quarterly period 2009:1-2021:4 for Turkey. The results demonstrate that the main macroeconomic variables such as GDP, domestic production, employment, investments, real wages experience a decline and both core and CPI inflation an increase in the presence of international energy price energy price shocks. Moreover, the different scenarios of monetary policy responses to both core inflation and output deviations from their steady states which are strong, baseline and weak policy responses are illustrated and discussed. In the scenario in which monetary policy responds most strongly to deviation in the core inflation in the face of energy shocks; the decline in GDP, domestic production, investments and employment and the increases in core and CPI inflation are the highest while the increase in real wages are the lowest. In the scenario where monetary policy reacts strongly to the output deviation, the decrease in real wages and the increase in core and CPI inflation are experienced as the highest, while the decrease in GDP, domestic production, investments and employment turn out to be the lowest. These effects appear to differ in scenarios where monetary policy responds weaker to inflation and the output gap. As for a policy implication, the internationally coordinated contractionary monetary policy can be pursued to restrain the negative impacts of the international shocks. Macroeconomics Energy Price Shocks Monetary Policy DSGE Model Turkey Full Text Additional Declarations The authors declare no competing interests. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. 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