This paper considers monetary and scal policy responses to oil price shocks in low income oil importing countries. I examine the dynamic properties and the welfare implications of a set of ination targeting policies and a group of policies where the government provides a subsidy on household...

This paper examines exchange rate management issues when a small open economy is hit by an exogenous oil price shock. In this model consumer durables play an important role in the demand for oil and oil based products as opposed to the traditional role of oil as a factor of production. When...

The literature on the exchange-rate-based stabilization has focused almost exclusively in Latin America. Many other countries however, such as Egypt, Lebanon and Turkey; have undertaken this sort of programs in the last 10-15 years. I depart from the existing literature by developing a model...