Empirical approaches and models for assessing the effects of climate change on the economy and monetary policy

Эмпирические подходы и модели оценки последствий климатических изменений для экономики и денежно-кредитной политики

Kuznetsova, Maria (Кузнецова, Мария) () and Sinelnikova-Muryleva, Elena (Синельникова-Мурылева, Елена) ()
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Kuznetsova, Maria (Кузнецова, Мария): The Russian Presidential Academy of National Economy and Public Administration
Sinelnikova-Muryleva, Elena (Синельникова-Мурылева, Елена): The Russian Presidential Academy of National Economy and Public Administration

Working Papers from Russian Presidential Academy of National Economy and Public Administration

Abstract: The relevance of the research is due to the observed climate changes, the increasing impact of these changes on the economy and the growing relevance of the climate agenda in the policy-making and policy implementation processes. The main subject of the study is the impact of climate change on the economy. The main aim of this work is to review empirical studies devoted to the analysis and degree of influence of climate change on economic indicators and monetary policy. To achieve this goal, such tasks as identification and description of the main channels of climate influence on the economy, review of various approaches to modeling the impact of climate on gross domestic product and consumer price index, identification of recommendations on the monetary policy were performed. The main method is descriptive analysis. The results of the empirical review indicate that there is a significant relationship between climate indicators and GDP/CPI. The main conclusion of the study is that there is no unified approach to modeling factors reflecting climate change in the literature at the moment, and there is also no unified approach to the specifications of equations that allow assessing the relationship between climate change and various economic indicators. Regardless of the functional form of the equations and the set of variables, the results indicate that negative climate changes lead to a decrease in GDP and/or an increase in inflation. The scientific novelty of the work lies in the systematization of existing works on the study of the impact of climate on certain economic indicators. The study’s recommendation is to conduct a more thorough analysis of the effects of climate change and to take them into account during the development and implementation of monetary policy.

Keywords: climate; climate change; monetary policy; green bonds (search for similar items in EconPapers)
JEL-codes: E20 E31 E50 E58 G10 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2023
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