Addressing the Renewable Energy Challenges through the Lens of Monetary Policy—Insights from the Literature

Iulia Lupu, Adina Criste, Tudor Ciumara, Camelia Milea and Radu Lupu ()
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Tudor Ciumara: “Victor Slăvescu” Centre for Financial and Monetary Research, Romanian Academy, 050711 Bucharest, Romania
Radu Lupu: Institute for Economic Forecasting, Romanian Academy, 050711 Bucharest, Romania

Energies, 2024, vol. 17, issue 19, 1-31

Abstract: This review explores the interplay between renewable energy and monetary policy, highlighting how central banks can contribute to renewable energy development. Although the shift towards renewable energy is tremendous for sustainable development, it also comes with notable economic and financial challenges. Supervenient, the energy transition has raised significant interest among decision-makers and academia, prompting them to explore new innovative policies and strategies; as a result, these actions acknowledged that research in this field is essential for identifying optimal solutions. Moreover, recent global crises, including the energy crisis, have emphasised the important role of macroeconomic policies in crisis management. Within this framework, it’s essential to investigate how monetary policy, as the main tool of central banks, can foster renewable energy development. This comprehensive review systematically examines existing literature through a semi-structured literature analysis, which allows for a more flexible, complex, and thorough approach to identifying key issues and providing insights into the potential of monetary policy to address renewable energy challenges. We identified four main clusters of research: sustainability and development, economic growth and energy, monetary policy and investment, and emissions and renewable energy. Furthermore, exploring the interaction between monetary policy and renewable energy objectives to uncover paths for harmonizing monetary strategies with the goals of renewable energy development contributes to highlighting the existing gaps in the field and represents a starting point for further research topics. This study provides a comprehensive overview of the existing knowledge, identifies gaps in the literature, and suggests directions for future research.

Keywords: sustainable development; energy policy; central bank’s strategy; literature review; narrative methods; qualitative research (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2024
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