Does climate change lead financial instability?: A benchmark result

Eisei Ohtaki

No e175, Working Papers from Tokyo Center for Economic Research

Abstract: Does climate change lead financial instability? To address this problem, this study builds an overlapping generations model of the environment and money. Contrary to predictions of the majority, it is shown that, under a certain condition, a unique stationary monetary equilibrium exists and is a saddle point. Furthermore, it is shown that the optimal gross rate of money growth, which maximizes the welfare at the stationary monetary equilibrium, exists uniquely and is greater than one.

Pages: 13 pages
Date: 2023-01
New Economics Papers: this item is included in nep-dge, nep-env and nep-mon
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