Toward a Green Economy: The Role of the Central Bank’s Asset Purchases

Alessandro Ferrari and Valerio Nispi Landi

International Journal of Central Banking, 2023, vol. 19, issue 5, 287-340

Abstract: We use a DSGE model to study the effectiveness of greenasset purchases by the central bank (Green QE), along the transition to a carbon-free economy driven by an emission tax. In our baseline calibration, where green and brown goods are imperfect substitutes, Green QE helps to further reduce emissions, but the quantitative impact on pollution is small; the effects become slightly larger if the purchases are carried out in the early stage of the transition. The elasticity of substitution between green and brown goods is a crucial parameter: if the goods are imperfect complements, Green QE raises emissions.

JEL-codes: E52 E58 Q54 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Toward a green economy: the role of central bank’s asset purchases (2023)
Working Paper: Toward a green economy: the role of central bank's asset purchases (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:ijc:ijcjou:y:2023:q:5:a:7

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