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

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.

Likely emissions pathways in the 21st century

Frances Moore (UC Davis) has selected recent research that attempts to estimate the likelihood of different greenhouse gas emission pathways. Such estimates must take the socio-political-technical processes that influence emission pathways into account.

Heterogeneous expectations and climate change

Francesca Diluiso (Bank of England) has selected some recent research on how to incorporate heterogeneous expectations in models that evaluate effects of climate policies on the macroeconomy.

Modelling uncertainty in climate economics

Loïc Berger (Researcher at the CNRS and Professor of Economics at IÉSEG School of Management) highlights research on incorporating uncertainty in analytical models for the purpose of making quantitative assessments of alternative policies.

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