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Nature degradation and price stability: implications and research questions for monetary policy

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  • Waaifoort, Maria
  • Almeida, Elena

Abstract

Nature degradation can negatively affect output, investment, employment, consumption and trade, with potential implications for price stability. This policy brief examines how nature degradation affects key macroeconomic indicators, with a focus on deforestation. It argues that central banks should consider the impacts of nature degradation alongside climate-related factors in monetary policy.

Suggested Citation

  • Waaifoort, Maria & Almeida, Elena, 2025. "Nature degradation and price stability: implications and research questions for monetary policy," LSE Research Online Documents on Economics 129329, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:129329
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    File URL: http://eprints.lse.ac.uk/129329/
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    References listed on IDEAS

    as
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    3. Ceglar, Andrej & Parker, Miles & Pasqua, Carlo & Boldrini, Simone & Gabet, Marie & van der Zwaag, Sjoerd, 2024. "Economic and financial impacts of nature degradation and biodiversity loss," Economic Bulletin Articles, European Central Bank, vol. 6.
    4. Lelli, Chiara & Parisi, Laura & Heemskerk, Irene & Boldrini, Simone & Ceglar, Andrej, 2023. "Living in a world of disappearing nature: physical risk and the implications for financial stability," Occasional Paper Series 333, European Central Bank.
    5. Beirne, John & Dafermos, Yannis & Kriwoluzky, Alexander & Renzhi, Nuobu & Volz, Ulrich & Wittich, Jana, 2024. "Weather-related disasters and inflation in the euro area," Journal of Banking & Finance, Elsevier, vol. 169(C).
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    More about this item

    JEL classification:

    • F3 - International Economics - - International Finance
    • G3 - Financial Economics - - Corporate Finance and Governance
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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