![]() JEL Code E51 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Money Supply, Credit, Money Multipliers E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy Q54 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics→Climate, Natural Disasters, Global WarmingĪbstract We study euro area investors' portfolio adjustment since the Brexit referendum in terms of securities issued in the UK or denominated in pound sterling, in the context of heightened policy uncertainty surrounding the exit process of the UK from the EU. However, green QE could serve as a complementary instrument, especially if governments fail to coordinate on introducing a sufficiently ambitious carbon tax on the global scale. Compared with a carbon tax, we find that green QE would contribute only moderately to reducing global temperatures, while partially crowding out green private investment. ![]() This article focuses on green quantitative easing (QE). Central banks around the world have adopted different strategies to consider climate change in their monetary policy frameworks. JEL Code E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity O33 : Economic Development, Technological Change, and Growth→Technological Change, Research and Development, Intellectual Property Rights→Technological Change: Choices and Consequences, Diffusion Processes O43 : Economic Development, Technological Change, and Growth→Economic Growth and Aggregate Productivity→Institutions and Growth O52 : Economic Development, Technological Change, and Growth→Economywide Country Studies→Europe O57 : Economic Development, Technological Change, and Growth→Economywide Country Studies→Comparative Studies of CountriesĪbstract While there is broad consensus that carbon pricing is an effective instrument for combatting climate change, the potential contribution of central banks is still debated. The results suggest that better institutions and governance tend to be associated with greater growth-enhancing effects from digital technologies. It discusses a number of theoretical mechanisms and empirical evidence for different sets of European and other countries. This paper focuses on the effects of digitalisation on economic growth, and how those effects may be impacted by institutions and governance. JEL Code D12 : Microeconomics→Household Behavior and Family Economics→Consumer Economics: Empirical Analysis D84 : Microeconomics→Information, Knowledge, and Uncertainty→Expectations, Speculations E21 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Consumption, Saving, Wealth E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary PolicyĪbstract Digitalisation may be viewed as a sequence of supply and technology shocks affecting the economy through productivity and output, employment and labour markets, competition and market structure. Consistent with this, the reversal appears to be causally related to central bank information shocks and concentrated among older consumers and consumers with lower educational attainment. ![]() Such a “savings’ reversal” is consistent with the behavioural evidence on money illusion as well as with a negative signalling effect from policy announcements in a liquidity trap and may weaken the direct stimulatory effects from very low and negative rates. ![]() At very low levels, there is evidence that the savings response may even reverse sign. This response is positive when interest rates are high but declines steadily at lower levels. Exploiting cohorts of consumers from a data-rich multi-country survey, we show how the strength of interest rate transmission to savings varies with the level of nominal interest rates. Abstract We study interest rates transmission to savings at low and negative rates. ![]()
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