The Friedman rule states that steady-state welfare is maximized when there is deflation at the real rate of interest. Recent work by Khan et al. (2003) uses a richer model but still finds deflation optimal. In an otherwise standard new Keynesian model we show that, if households have hyperbolic...

Recent literature has emphasised that the degradation of nature can have significant implications for central banks in delivering on their mandates. While the primary and most effective actors to address the nature crisis are governments and legislators, central banks will also need to take into...