Business Cycle with Bank Intermediation in Oil Economies
39 Pages Posted: 15 Nov 2018
Date Written: October 2018
The structural model in this paper proposes a micro-founded framework that incorporates an active banking sector with an oil-producing sector. The primary goal of adding a banking sector is to examine the role of an interbank market on shocks, introduce a national development fund and study its link to the banking sector and the government. The government and the national development fund directly play key roles in the propagation of the oil shock. In contrast, the banking sector and the labor market, through perfect substitution between the oil and non-oil sectors, have major indirect impacts in spreading shocks.
Keywords: Banking, Financial crises, Central banks and their policies, Oil-exporting countries, Oil-Reserve Fund, DSGE, Financial Markets and the Macroeconomy, General
JEL Classification: E44, E50, E58, G01, G21, G33
Suggested Citation: Suggested Citation