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

Hélène Rey

“Transition to net zero and macroeconomics”

Event description

Hélène Rey presented the current state of work on the effect of carbon pricing on central banking and macroeconomic indicators, such as output, inflation and measures of inequality. Rey warned of a possible conflict between carbon pricing (and its inflationary effect for energy prices) and central banks’ price stability mandate: the transitory increase in energy prices should not necessarily lead to inflation targeting measures, which also bring down price levels in other goods markets. The London Business School Professor suggested that independent carbon councils, modelled after central banks, should receive the public mandate to ensure net zero emissions in 2050. They would establish a credible, gradual and predictable development of the carbon price to smooth over the transition to net zero.


Emanuele Campiglio
Associate Professor, University of Bologna

Hélène Rey

Hélène Rey is the Lord Bagri Professor of Economics at London Business School. Until 2007, she was at Princeton University, as Professor of Economics and International Affairs in the Economics Department and the Woodrow Wilson School. Her research focuses on the determinants and consequences of external trade and financial imbalances, the theory and empirics of financial crises and the organization of the international monetary system. She demonstrated in particular that countries’s gross external asset positions help predict current account adjustments and the exchange rate. She introduced the concept of Global Financial Cycles and qualified the idea of the Mundellian Trilemma. She is a member of the Group of Thirty, of the Bellagio Group on the international economy and a member of the external advisory group to the managing director of the IMF. She is a member of the Haut Conseil de Stabilité Financière (French Macro Prudential Authority). Hélène Rey received her undergraduate degree from ENSAE, a Master in Engineering Economic Systems from Stanford University and her PhDs from the London School of Economics and the Ecole des Hautes Etudes en Sciences Sociales.

Paper and slides

"Mainstreaming the Transition to a Net Zero Economy"

"Transition to Net Zero and Macroeconomics" (Slides)



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