Monetary policy and economic performance in resource dependent economies

Abstract EN

The aim of this paper is to explore and quantify the role of monetary policy on economic performance in resource-based economies, with a particular focus on Middle East economies.

We consider two dimensions of performance: long-run economic growth and price instability (inflation).

At the international level, there is mixed evidence regarding the long-run growth record of resource-abundant economies.

In some countries, natural resources have turned into a curse of protracted inefficiency, low economic growth and perpetual instability.

In other economies, natural resources have played an important role in fostering stability and sustained economic growth.

Furthermore, resource rich economies tend to suffer from higher and more unstable levels of price inflation; nevertheless, this malaise is less pronounced in oil exporters.

A crucial component in our study is to assess the role of exchange rate regimes and their interplay with monetary and fiscal policies.