The macroeconomic effects of a greener technology mix

Fabrizio Ferriani (), Andrea Giovanni Gazzani and Filippo Natoli ()
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Fabrizio Ferriani: Bank of Italy
Filippo Natoli: Bank of Italy

No 1482, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: What are the macroeconomic implications of shifting to greener technologies in the transition towards a low-emission economy? We identify shocks to the composition of US innovation entailing a shift towards greener technologies by exploiting granular data on the universe of patents granted in the United States. The rebalancing towards green technology is costly in the short run – lowering output and raising inflation – but Pareto-improving in the medium run, when the recessionary effects dissipate, the emissions intensity of output declines persistently, and energy production shifts towards renewables. These effects are independent of variations in national and international climate policy commitments.

Keywords: patents; technology shock; green transition; business cycle (search for similar items in EconPapers)
JEL-codes: E31 E32 O34 Q5 (search for similar items in EconPapers)
Date: 2025-03
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