The Evolving Relationship between Global Monetary Policy, Inflation Dynamics, and Oil Demand in a Post-Pandemic Era

Abstract

This study examines the intricate relationship between global monetary policy, prevailing inflation levels, and their collective influence on oil demand and prices. With central banks navigating disinflationary pressures while some economies, like the US, face persistent inflation above target , the research will explore how anticipated accommodative monetary policies in 2024-2025 are expected to stimulate economic activity and, consequently, oil demand, particularly in non-OECD regions. The study will also consider the varying pass-through effects of oil price shocks on wages and consumer prices, noting higher impacts in emerging economies and under conditions of higher pre-existing inflation. Utilizing a macro-econometric model, this research aims to forecast potential scenarios for oil market stability under different monetary policy trajectories and inflation outcomes, offering insights for energy market forecasting and national economic planning.