This article discusses the need for climate change risk mitigation and why it is not the responsibility of Central Banks to mitigate climate change risk. The paper argues that the responsibility for managing climate change risk should lie with elected officials, other groups and institutions but...

Purpose: This chapter discusses some policy options that central banks may find useful in dealing with climate change risk in the financial sector. Methodology: This chapter uses discursive analysis to suggest policy options which central banks can use to deal with the risk of climate change in...

In this paper, we discuss how environmental damage and emission reduction policies affect the conduct of monetary policy in a two-sector (clean and dirty) dynamic stochastic general equilibrium model. In particular, we examine the optimal response of the interest rate to changes in sectoral...

We develop a two sector incomplete markets integrated assessment model to analyze the effectiveness of green quantitative easing (QE) in complementing fiscal policies for climate change mitigation. We model green QE through an outstanding stock of private assets held by a monetary authority and...

Since the birth of the natural rate hypothesis, the conventional notion that short-term output simply fluctuates around a relatively stable long-term trend became the norm in modern macroeconomics, including in the standard New Keynesian DSGE model. However, the global financial crisis (GFC) led...