Program: Monetary

Is It Time To Take Away The Carbon Punch Bowl?

| 5 September 2017
Blog, Monetary | Tags: Climate Change, Financial Stability, Macroprudential Regulation
Climate change poses serious financial risks. Perhaps the biggest systemic risk is a disorderly transition to a low carbon economy. As noted in the Bank of England’s ‘response to Climate Change’, current forecasts suggest that to keep global average temperatures below 2 degrees, around two-thirds of ... continue reading

Monetary Policy and the Redistribution Channel

| 28 June 2017
Monetary, Working Papers | Tags: Income Inequality, Inflation, Interest Rates
This paper evaluates the role of redistribution in the transmission mechanism of monetary policy to consumption. Three channels affect aggregate spending when winners and losers have different marginal propensities to consume: an earnings heterogeneity channel from unequal income gains, a Fisher channel from unexpected inflation, ... continue reading

Why Monetary Policy Should Go Green

| 19 May 2017
Blog, External, Monetary | Tags: Climate Change, Collateral Frameworks, Green Finance, QE
Guest Post, FT Alphaville. Monetary policy is rarely a topic in debates on green finance. It should. The €60bn that the European Central Bank is currently injecting into financial markets on a monthly basis are a case in point. Its intervention amounts to nearly three ... continue reading

Monetary Policy, Macroprudential Regulation and Inequality

| 12 April 2017
Discussion Notes, Monetary | Tags: Inequality, Interest Rates, Macroprudential Regulation
The 2008 global financial crisis profoundly changed the role of central banks in the economy. First, central banks engaged in strong expansionary monetary policy, using new unconventional tools to boost economic activity. Second, they were key to containing financial instability, which led them to implement ... continue reading

Inequality Should Matter for Central Banks

and | 16 February 2017
Blog, Monetary | Tags: Central Banks, Inequality, Quantitative Easing
Central bankers have long been discreet about the links between monetary policy and inequality. They justify this reserve by the fact that their mandates do not charge them with addressing inequality and they generally argue that by providing price stability, central banks maintain the existing ... continue reading