Weathering the storm: sectoral economic and inflationary effects of floods and the role of adaptation
Matteo Ficarra (Geneva Graduate Institute) and Rebecca Mari (Bank of England) use satellite data on floods to estimate the impact of floods on GDP and inflation at the sector level in English counties.
Greenflation and implications for monetary policy
The recent experience with surging inflation, partly driven by supply shocks to the energy sector, has ampiflied concerns over “greenflation,” inflationary pressures resulting from the transition to sustainable energy sources. For this digest Conny Olovsson (ECB and Sveriges Riksbank) and David Vestin (Sveriges Riksbank) have curated the most recent literature on the theoretical and empirical findings on how greenflation arises and what central banks can do to curb it. They, and the papers they have chosen, highlight the central role for foresighted monetary policy as well as a smooth carbon taxation path.
The impact of climate change on price stability
To secure price stability and fulfill their primary mandate, policymakers should act promptly: interest rate management, expectation anchoring, financial stabilization, cooperation with fiscal authorities are just some of the tools at their disposal.