Macroeconomic effects of carbon-intensive energy price changes: A model comparison

Matthias Burgert, Matthieu Darracq Pariès, Luigi Durand Central, Mario González, Romanos Priftis, Oke Röhe, Matthias Rottner, Edgar Silgado-Gómez, Nikolai Stähler and Janos Varga
Additional contact information
Matthieu Darracq Pariès: EUROPEAN CENTAL BANK
Luigi Durand Central: BANK OF CHILE
Mario González: CENTRAL BANK OF CHILE
Romanos Priftis: EUROPEAN CENTRAL BANK
Matthias Rottner: BIS AND DEUTSCHE BUNDESBANK
Edgar Silgado-Gómez: BANCO DE ESPAÑA
Nikolai Stähler: DEUTSCHE BUNDESBANK
Janos Varga: EUROPEAN COMMISSION

No 2550, Working Papers from Banco de España

Abstract: This paper presents a novel model comparison to examine the challenges for monetary policy posed by changes in carbon-intensive energy prices. The environmental monetary models employed have a detailed multi-sector structure. The comparison assesses the effects of both a temporary and a permanent energy price increase, with a particular focus on the euro area and the United States. The temporary and permanent price shocks are both inflationary. However, the inflationary impact of the permanent shock depends on the underlying model assumptions and monetary policy response. In addition, the analysis establishes that these models share significant commonalities in their quantitative and qualitative results, while also revealing cross-country differences.

Keywords: climate change; monetary policy; multi-sector models; model comparison; DSGE models (search for similar items in EconPapers)
JEL-codes: C54 E52 H23 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2025-12
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Working Paper: Macroeconomic effects of carbon-intensive energy price changes: a model comparison (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:2550

DOI: 10.53479/41985

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