![]() Climate change matters for price stability. Overall, our results suggest that temperature plays a non-negligible role in driving medium-term price developments. We also provide simulations from a two-country model to understand the rationale behind the results. ![]() Such effect is largely non-linear, being more significant for larger shocks and at higher absolute temperatures. But over the medium term, the impact across the various price indices tends to be either insignificant or negative. Hot summers increase food price inflation in the near term, especially in EMEs. Using panel local projections for 48 advanced and emerging market economies (EMEs), we study the impact of country-specific temperature shocks on a range of prices: consumer prices, including the food and non-food components, producer prices and the GDP deflator. JEL Code E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their PoliciesĪbstract We contribute to the debate surrounding central banks and climate change by investigating how extreme temperatures affect medium-term inflation, the primary objective of monetary policy. The central bank objective is widely seen as the most important topic for monetary policy communication, and several respondents perceived a need for clarification of the ECB’s inflation aim, citing the ambiguity of the “below, but close to, 2%” formulation that was in place at the time of the survey. They judge communication with financial markets and experts as extremely important and adequate, but see substantial room for improvement in the communication with the general public. ![]() Respondents view enhancing credibility and trust as the most important objective of central bank communication. Pronounced differences across the respondent groups are rare, suggesting that there is broad consensus on the various issues. Abstract This paper reports the results of a survey of former members of the Governing Council of the European Central Bank, which sought their views on monetary policy communication practices, the related challenges and the road ahead.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |