Climate change and monetary policy: issues for policy design and modelling

Abstract

This paper explores the interaction of monetary policy and climate change as they jointly influence macroeconomic outcomes, connecting policy and outcomes in each realm to the implications of the other. It also explores the nature of the macroeconomic model that would be required to explore the links between monetary policy and climate policy. The paper has four parts. First, it reviews the relevant macroeconomic outcomes of emissions mitigation policy and climatic disruption, exploring how negative supply sho…