Warsaw Economic Seminars już 16.11

Omawiane zagadnienie: „The climate-induced monetary stress in the euro area”. 

Seminarium przewidziane jest na godz. 17.00 i zrealizowane zostanie hybrydowo: 
- stacjonarnie w s. B202 (WNE UW) 
- on-line za pośrednictwem platformy Zoom 
Identyfikator spotkania: 933 0228 1672
Kod dostępu: 254160

Abstract:
Climate change in the euro area is likely to lead to asymmetric shocks within the currency union, thus challenging the price stability mandate of the ECB. In this paper, we aim to analyze the consequences of climate change on the cost and standard of living in this monetary union for its member countries. First, we measure the responses to temperature shocks of euro area countries over the period 1996-2021. We then use climate projections published by the IPCC along the coefficients estimated in the first step to calculate the projected temperature-induced changes in inflation and GDP per capita of euro area countries over the next 100 years. Finally, we compute the counterfactual policy rate each euro area country would need to address these projected changes in macroeconomic variables. Our results suggest persistent differences in the policy rate required to face the shocks induced by climate change. These findings suggest an additional burden on the ECB's single monetary policy, and may constitute a challenge for the long-term sustainability of the euro area.