The Effectiveness of Unconventional Monetary Policy in Oil-Producing Countries: A Comparative Analytical Study
DOI:
https://doi.org/10.54536/ajebi.v5i2.6486Keywords:
Economic Stability, Oil-Producing Countries, Quantitative Easing, Unconventional Monetary PolicyAbstract
This study aims to assess the effectiveness of unconventional monetary policy tools in oil-producing countries over the period 2008–2023. These tools pose a particular challenge in these economies due to their volatility and dependence on oil revenues. The study used a longitudinal data analysis methodology on a sample of 12 oil-producing countries, applying fixed-effects models and advanced regression techniques to measure the impact of tools such as quantitative easing, reverse repo operations, and negative interest rate policies. It found that the effectiveness of these tools differs significantly between oil-producing countries and their effectiveness in conventional advanced economies. It also found that quantitative easing had limited success in stimulating the economy (coefficient 0.23, p < 0.05). Low interest rate policies showed a greater positive effect on private investment (coefficient 0.41, p < 0.01). This study goes further to suggest that adopting unconventional monetary policy can only succeed through close coordination of fiscal policy and diversification of government revenue sources, especially in oil-producing countries. The results of these studies provide important contributions to policymakers in improving the effectiveness of unconventional monetary policy tools to address oil price shocks.
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