The E-axes Forum on Climate Change, Macroeconomics, and Finance

Homeward Bound: How Migrants Seek Out Familiar Climates

Charles A. Taylor (Harvard Business School) and Marco Tabellini (Harvard Business School) introduce the concept of “climate matching” as a driver of migration and establish several new results. They show that climate strongly predicts the spatial distribution of immigrants in the US, as movers select destinations with climates similar to their place of origin.

Green Credit Guidance

Historically, central banks and other financial policymakers have played far larger roles in supporting structural economic transformations through the use of credit policies. In this Digest, Katie Kedward (UCL Institute for Innovation and Public Purpose) reflects upon the potential relevance of credit policies to support the green transition.

Growth and Global Warming

Ishan Nath (Federal Reserve of San Francisco) highlights the effects of global warming on economic growth and discusses why some related research reaches contradicting conclusions.

Pricing climate-related risks into sovereign bonds

Understanding the linkages between climate vulnerability and sovereign debt risk is pivotal for countries that want to step up their climate mitigation strategies. Bhavya Gupta (National University of Singapore) and Ramkishen S. Rajan (National University of Singapore) have curated the most recent theoretical and empirical literature on the effects of climate on sovereign debt risk.

Climate Policies and Protectionism

In this brief, we ask whether the implementation of national climate policies may spur a global race to protectionism. Consumer or production subsidies and border carbon adjustments may have positive mitigation effects but can also generate trade distortions and give national industries a competitive advantage against foreign firms.

Climate Stress Tests: an Overview

Climate stress tests were built to assess climate systemic risk in the financial system. They demand resources from supervisors and banks alike, but are proving useful to inform macroprudential policies.

What do we know about climate finance?

Matteo Gasparini (Oxford University) creates a map of the main branches of the climate finance literature and classifies it according to different dimensions, shedding light on the emerging strands.

Judge progress at COP27 against the demands of the science

The demand for ‘loss and damage’ finance by vulnerable developing countries is growing. This demand featured heavily at the recent COP27. Danae Kyriakopoulou (LSE Grantham Institute) shares her thoughts on its successes and failures.

Frontiers of climate and nature in macroeconomics and finance

poppy flowers and other meadow flowers with a view of the sky. Photo by Palle Knudsen.

The macroeconomic challenges from climate and nature change are constantly becoming more prevalent. At a conference hosted by the Banque de France on October 24-25, 2022, early career researchers presented cutting-edge analysis and policy solutions to tackle these challenges. This digests highlights important moments of this conference.

Climate Risks in Financial Markets

Climate change has a destabilizing effect on financial markets. If market actors become overexposed to climate-sensitive assets, the ensuing market failure provides justification for central bank intervention to prevent cascading financial effects.

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