publication . Master thesis . 2017

Oil price and the exchange rate - A study on how the oil price affects the Norwegian Krone exchange rate under different monetary policy regimes

Tryggestad, Tord Stokke; Haagensen, Jens Dahl;
Open Access English
  • Published: 01 Jan 2017
  • Publisher: NTNU
Abstract
We show the existence of a statistically significant short-term relationship between the Norwegian exchange rate and the oil price, and how this effect increased following the introduction of inflation targeting by Norges bank. Assuming that both the theories of purchasing power parity and uncovered interest parity hold in the long run, we combine the two to form a theoretical equilibrium correction model. By assuming that the expected exchange rate is affected by some real factors, the oil price is included in the model. Emphasizing the role of monetary policy on the oil price effect we split our time period into two, before and after inflation targeting was of...
Subjects
free text keywords: :Samfunnsvitenskap: 200 [VDP], :Samfunnsvitenskap: 200::Økonomi: 210::Samfunnsøkonomi: 212 [VDP]
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Master thesis . 2017
Provider: NTNU Open
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