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Revisiting monetary policy and price stability in the green transition

Author

Listed:
  • Jackson, Andrew
  • Svartzman, Romain
  • Barmes, David
  • Pereira da Silva, Luiz Awazu

Abstract

Climate change and volatile fossil fuel prices increasingly drive macroeconomic and price instability. A successful green transition is a precondition for price stability in the long term but could generate inflationary pressures over shorter time horizons. A restrictive monetary response to such pressures would disproportionately affect the capital-intensive green investment needed for a transition. To maintain price stability without compromising the green transition, we propose adaptive inflation targeting, adjustments to monetary operations, and an institutional architecture for systematic monetary–fiscal coordination.

Suggested Citation

  • Jackson, Andrew & Svartzman, Romain & Barmes, David & Pereira da Silva, Luiz Awazu, 2026. "Revisiting monetary policy and price stability in the green transition," LSE Research Online Documents on Economics 140416, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:140416
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    File URL: https://researchonline.lse.ac.uk/id/eprint/140416/
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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
    • N0 - Economic History - - General

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