Monetary Policy and Green Transition

Pál Kolozsi, Balazs Istvan Horvath (), Judit Csutine-Baranyai () and Veronika Tengely ()
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Balazs Istvan Horvath: Magyar Nemzeti Bank
Judit Csutine-Baranyai: Magyar Nemzeti Bank
Veronika Tengely: Magyar Nemzeti Bank

Financial and Economic Review, 2022, vol. 21, issue 4, 7-28

Abstract: One of the biggest challenges in the coming decades is the achievement and maintenance of environmental sustainability, regarding which the central banks have also shown an increasingly active and supportive attitude in recent years. A new monetary policy approach is emerging, but it is unclear how central banks can participate in the green transition. In this paper, we briefly present the most relevant issues in this regard, namely how price stability, which is the most important objective of central banks, is affected by climate change and the green economic transformation; what follows from the potential conflict between the goals of green transition and price stability in terms of the green activity of central banks; and what challenges are faced as a result by central banks that also have the sustainability goal in mind.

Keywords: environmental sustainability; green finance; monetary policy (search for similar items in EconPapers)
JEL-codes: E58 E61 Q5 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:mnb:finrev:v:21:y:2022:i:4:p:7-28

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