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We study the implications of climate change and the associated mitigation measures for optimal monetary policy in a canonical New Keynesian model with climate externalities. Provided they are set at their socially optimal level, carbon taxes pose no trade-offs for monetary policy: it is both...
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The theory and practice of stabilization policy has taken many turns as it evolved over the past century, oscillating … economy in the face of macroeconomic shocks. Views on this question have been shaped by experience, theory and ideology to …
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