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Monetary policy and renewable energy production

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  • Chen, Shiu-Sheng
  • Lin, Tzu-Yu

Abstract

This paper examines the relationship between monetary policy and renewable energy. Using US quarterly data from 1990:Q1 to 2023:Q2, we employ a stylized monetary policy structural vector autoregressive model and provide evidence that monetary tightening reduces the production of renewable energy. Among different sources of renewable energy, solar energy shows the most significant response. Finally, a counterfactual policy analysis provides evidence that monetary policy can either offset or exaggerate other structural shocks on renewable energy production, depending on the sources of these shocks.

Suggested Citation

  • Chen, Shiu-Sheng & Lin, Tzu-Yu, 2024. "Monetary policy and renewable energy production," Energy Economics, Elsevier, vol. 132(C).
    • Handle: RePEc:eee:eneeco:v:132:y:2024:i:c:s0140988324002032
    DOI: 10.1016/j.eneco.2024.107495
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    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects

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