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Malgorzata Osiewicz

21 September 2021
OCCASIONAL PAPER SERIES - No. 271
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Abstract
This paper analyses the implications of climate change for the conduct of monetary policy in the euro area. It first investigates macroeconomic and financial risks stemming from climate change and from policies aimed at climate mitigation and adaptation, as well as the regulatory and fiscal effects of reducing carbon emissions. In this context, it assesses the need to adapt macroeconomic models and the Eurosystem/ECB staff economic projections underlying the monetary policy decisions. It further considers the implications of climate change for the conduct of monetary policy, in particular the implications for the transmission of monetary policy, the natural rate of interest and the correct identification of shocks. Model simulations using the ECB’s New Area-Wide Model (NAWM) illustrate how the interactions of climate change, financial and fiscal fragilities could significantly restrict the ability of monetary policy to respond to standard business cycle fluctuations. The paper concludes with an analysis of a set of potential monetary policy measures to address climate risks, insofar as they are in line with the ECB’s mandate.
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 Policies
Q54 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics→Climate, Natural Disasters, Global Warming
29 July 2020
ECONOMIC BULLETIN - BOX
Economic Bulletin Issue 5, 2020
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Abstract
This box examines high-frequency data to quantify the impact of the coronavirus (COVID-19) pandemic on both job postings and hiring patterns in the euro area. Prior to the COVID-19 crisis, both of these indicators had increased steadily year on year, reflecting a rise in the number of job findings in the euro area. However, both the Indeed job postings and the LinkedIn hiring rate have declined significantly since the onset of the COVID-19 crisis and the lockdowns, with the hiring rate bottoming out in May 2020. While the decline in the hiring rate was broad-based across sectors, the intensity of the COVID-19 shock is asymmetric, with sectors such as recreation, travel and manufacturing being more affected by the crisis than others, such as healthcare, software and IT services sectors. Based on the high-frequency information derived from the hiring rate, the implied unemployment rate is expected to peak during the second quarter of 2020 and to be around 2.3 percentage points higher than in February. Overall, the methodology and the high-frequency data used in this box allow for a timely assessment of developments in the euro area labour market. The use of job flows in and out of unemployment helps to enhance our understanding of the labour market adjustment during the current COVID-19 crisis.
JEL Code
E24 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Employment, Unemployment, Wages, Intergenerational Income Distribution, Aggregate Human Capital
E27 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Forecasting and Simulation: Models and Applications