Climate and monetary policy. In particular on transition policies and their macroeconomic effects and monetary policy implications.

Please note the change of location for this week only.

Governmental authorities in most economies have implemented a wide variety of policies to address climate change. These policies, as well as the shocks associated with climate change itself affect macroeconomies, therefore with implications for monetary policy. One question is how various alternative climate policies undertaken within an economy might affect variables relevant to that monetary policy authority, including inflation and output. A second question is how the heterogeneity of climate policy choices by governmental authorities across economies might affect how monetary policy decisions for one economy transmits to another economy, to influence macroeconomic performance and monetary policy there. Recent research sheds some light on these questions, pointing to the importance of climate policy consistency for inflation expectations and monetary policy outcomes, and climate policy choices for inflation volatility and cross-border spillovers.