Monetary Policy and Resource Security

Gerzensee, Switzerland

  • Resource security – the capacity to meet current and future demand for food, water, land, energy and minerals – has been a key concern for policymakers for a long time. As global consumption levels rise, debates on how to safeguard natural capital are moving up the agenda worldwide. Various policy fields have been in focus in this context. Fiscal policy (e.g. initiatives to promote resource taxation) as well as trade policy (e.g. discussions about the effects of resource export controls) are examples for that.

    This workshop contributed to this debate by putting a spotlight on monetary policy and its current and potential future impact on resource security, as well as on monetary policy reactions to changes in resource prices and volatilities. It built upon the extensive body of research on the transmission mechanisms between monetary policy and commodity markets, explored how these channels affect short- and long-term resources supply and demand, and identified key questions for future analysis.

    The workshop is part of a larger CEP program to advance research and public debate on the impacts of monetary policy on sustainability and to build a network of academics and practitioners on this issue. In this context, it is also part of the process leading up to a CEP conference on “Monetary Policy and Sustainability” at the Bellagio Centre of the Rockefeller Foundation from 16-20 June 2014.

    Guiding questions

    The following questions provided initial guidance. Further topics were identified at the workshop:

    What is the impact of monetary policy on commodity spot and futures prices as well as volatility and correlation? What are the relevant channels in this context? How do these impacts affect resource supply, demand and inventories in the short as well as the long-term? How do these effects differ with regard to different commodity categories (e.g. renewable and non-renewable, storable and non-storable)?

    What are plausible scenarios for the future impact of monetary policy – in particular an unwinding of QE – on commodity markets? What are the likely effects of these scenarios on short- and long-term resource supply and demand?

    What is the expected impact of commodity scarcities on inflation as measured by different indicators such as headline and core Consumer Price Indexes as well as Producer Price Indexes or Import/Export Price Indexes? How should central banks react to that?

    Are there alternatives to current monetary policies that remain in line with central bank mandates, but are better aligned with the objective of resource security?

    Are there ideas for monetary reform that would strengthen the capacity to meet current and future demand for food, water, energy and minerals?

  •  22 April 2014

    14:00Introduction, Overview, Objectives and Agenda
    14:30Monetary Policy and Commodity Markets (I)
    The Impact of Monetary Policy Shocks on Commodity Prices
    Presenter: Marco Lombardi, Bank for International Settlements; Switzerland (Slides)
    Oil Prices, Exchange Rates and Asset Prices
    Presenter: Ine Van Robays, European Central Bank; Germany (Slides)
    17:00Monetary Policy and Commodity Markets (II)
    Monetary Policy Surprises and Changes in Commodity Futures Prices
    Ibrahim Jamali, American University of Beirut; Lebanon (Slides) (Paper)
    Causal Relations Between Commodities Futures and Spot Prices
    Kim Schartz, University of Zurich; Switzerland

     23 April 2014

    09:00Monetary Policy and Commodity Markets (III)
    Price Formation on Commodity Markets and Implications for Resource Security
    Presenter: David Bicchetti, United Nations Conference on Trade and Development; Switzerland (Slides) (Paper) (Paper)
    Energy Security. The Three Witches: Decline Rates, Soaring Capex, and Falling Exports
    Presenter: Mark Lewis, Kepler Cheuvreux; France (Slides)
    11:30Monetary Systems and Resource Security (I)
    Scarcity Amid Plenty
    Presenter: Izabella Kaminska, Financial Times; UK
    13:30Monetary Systems and Resource Security (II)
    Economic Growth, Resource Decoupling and Interest Rates
    Christian Kimmich, Research Group on Sustainable Money - WANG; Switzerland (Slides) (Paper)
    Energizing Money
    Josh Ryan-Collins, New Economics Foundation; UK (Slides) (Study)
    15:30The Way Forward
    18:30Drinks and Dinner

     24 April 2014

    09:00Open Space