Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/272866 
Year of Publication: 
2023
Series/Report no.: 
Staff Report No. 1053
Publisher: 
Federal Reserve Bank of New York, New York, NY
Abstract: 
We develop a two-sector New Keynesian model to analyze the inflationary effects of climate policies. Climate policies do not force a central bank to tolerate higher inflation, but may generate a tradeoff between the central bank's objectives for inflation and real activity. The presence and size of this tradeoff depends on how flexible prices are in the "dirty" and "green" sectors relative to the rest of the economy, and on whether climate policies consist of taxes or subsidies.
Subjects: 
green transition
inflation
central bank's tradeoffs
JEL: 
E12
E31
E52
Q54
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.