Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/269865 
Year of Publication: 
2023
Series/Report no.: 
Deutsche Bundesbank Discussion Paper No. 04/2023
Publisher: 
Deutsche Bundesbank, Frankfurt a. M.
Abstract: 
We propose and implement a method to identify shocks to transition risk, addressing key challenges regarding its definition and measurement. Our shocks are instances where significant new information about the economic relevance of climate change increases the valuation of green firms over brown firms. To illustrate our method, we identify shocks to transition risk in the United States. These shocks have important aggregate effects, also inducing financial instability. They are associated with events that increase the likelihood of an orderly transition, and they specifically affect parts of the economy related to fossil fuels and energy. We show that these main results carry over to Germany and the United Kingdom. Still, we find an important role for country specificities.
Subjects: 
Transition risk
climate change
financial stability
portfolio sort
tex-tual analysis
JEL: 
C30
E44
G12
Q43
Q54
Q58
ISBN: 
978-3-95729-935-2
Document Type: 
Working Paper

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