Climate change: possible macroeconomic implications
Since it influences key economic variables such as output and inflation, climate change matters for monetary policymakers such as the Monetary Policy Committee. While monetary policy cannot be expected to solve climate change, monetary policy makers need to monitor and understand its macroeconomic implications in order to achieve their inflation target.
This article explores the macroeconomic effects of physical impacts from climate change (such as extreme weather) and the transition to a net-zero economy (such as through less carbon intensive investment), with a particular focus on the UK economy.
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