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Macroeconomic effects of carbon-intensive energy price changes: A model comparison

Author

Listed:
  • Burgert, Matthias
  • Darracq Pariès, Matthieu
  • Durand, Luigi
  • González, Mario
  • Priftis, Romanos
  • Röhe, Oke
  • Rottner, Matthias
  • Silgado-Gómez, Edgar
  • Stähler, Nikolai
  • Varga, Janos

Abstract

This paper presents a novel model comparison to examine the challenges posed by changes in carbon-intensive energy prices for monetary policy. The employed environmental monetary models have a detailed multi-sector structure. The comparison assesses the effects of both a temporary and a permanent energy price increase with a particular focus on the euro area and the United States. Temporary and permanent price shocks are both inflationary. However, the inflationary impact of the permanent shock depends on the underlying model assumptions and monetary policy response. The analysis also estab- lishes that these models share large commonalities in their quantitative and qualitative results, while also pointing out cross-country differences.

Suggested Citation

  • Burgert, Matthias & Darracq Pariès, Matthieu & Durand, Luigi & González, Mario & Priftis, Romanos & Röhe, Oke & Rottner, Matthias & Silgado-Gómez, Edgar & Stähler, Nikolai & Varga, Janos, 2026. "Macroeconomic effects of carbon-intensive energy price changes: A model comparison," Discussion Papers 28/2026, Deutsche Bundesbank.
    • Handle: RePEc:zbw:bubdps:344529
    DOI: 10.71734/DP-2026-28
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    Keywords

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    JEL classification:

    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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