A green dilemma for monetary policy
Luca Fornaro, Veronica Guerrieri, Lucrezia Reichlin Accelerating the transition to a green economy is a necessity. This column argues that the green transition will create trade-offs for central banks. Phasing out polluting technologies is likely to temporarily slow down productivity growth, thus creating inflationary pressures. If central banks choose to ‘look through’ and let inflation […]
Monetary policy in response to tariff shocks
Paul Bergin, Giancarlo Corsetti Donald Trump’s victory in the recent US presidential election has re-ignited a debate over the macroeconomic effects of tariffs and the appropriate monetary policy response. This column argues that even if there is broad agreement that new tariffs would likely be inflationary for the US, the current situation presents various factors […]