The EIRIN Flow-of-funds Behavioural Model of Green Fiscal Policies and Green Sovereign Bonds
TL;DR: In this article, the authors developed the EIRIN flow-of-funds behavioural model to simulate the introduction of green fiscal policies and green sovereign bonds, and display their effects on firms' investments in the brown and green sector, on unemployment, on the credit and bonds market.
About: This article is published in Ecological Economics.The article was published on 2018-02-01. It has received 138 citations till now. The article focuses on the topics: Green growth & Bond market.
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TL;DR: The academic and policy debate regarding the role of central banks and financial regulators in addressing climate-related financial risks has rapidly expanded in recent years as mentioned in this paper, where the key controversies and potential research and policy avenues for the future are discussed.
Abstract: The academic and policy debate regarding the role of central banks and financial regulators in addressing climate-related financial risks has rapidly expanded in recent years. This Perspective presents the key controversies and discusses potential research and policy avenues for the future. Developing a comprehensive analytical framework to assess the potential impact of climate change and the low-carbon transition on financial stability seems to be the first crucial challenge. These enhanced risk measures could then be incorporated in setting financial regulations and implementing the policies of central banks.
297 citations
TL;DR: In this paper, a series of game models were developed to address the effects of green loans and government subsidies on green innovation activities of enterprises, and they derived a threshold value for loaning interest rate.
232 citations
TL;DR: In this article, the effects of climate change on financial stability and the financial and global warming implications of a green QE program were analyzed using a stock-flow-fund ecological macroeconomic model.
220 citations
TL;DR: In this article, price connectedness between the green bond and financial markets using a structural vector autoregressive (VAR) model that captures direct and indirect transmission of financial shocks across markets was studied.
215 citations
TL;DR: The study in the age of the 4th industrial revolution examines the time and frequency domain connectedness and spill-over among Fintech, green bonds, and cryptocurrencies to suggest that the total connectedness of 21st century technology assets and traditional common stocks is very high, and hence in the turbulent economy, there is a high probability of contemporaneous losses.
149 citations
Cites background from "The EIRIN Flow-of-funds Behavioural..."
...Green bonds have become increasingly popular because they are recognized as an appropriate financial instrument for the transition to a low-carbon economy (Monasterolo and Raberto 2018)....
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...In the past, studies of this nature have examined market volatility transmission across several markets by applying the causality analytical framework, the systematic risk co-movement and the spill-over index (Kommel et al., 2018; Monasterolo and Raberto 2018; Ortas and Moneva 2013)....
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...…interdependence with other assets, bitcoin and green, both of which are rapidly gaining high attention from recent researchers (Corbet et al., 2019; Dyhrberg 2016a; Febi et al., 2018; Gandal and Hałaburda 2014; Monasterolo and Raberto 2018; Pham 2016; Reboredo and Ugolini 2020; Selmi et al., 2018)....
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References
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01 Jan 2007
TL;DR: The first volume of the IPCC's Fourth Assessment Report as mentioned in this paper was published in 2007 and covers several topics including the extensive range of observations now available for the atmosphere and surface, changes in sea level, assesses the paleoclimatic perspective, climate change causes both natural and anthropogenic, and climate models for projections of global climate.
Abstract: This report is the first volume of the IPCC's Fourth Assessment Report. It covers several topics including the extensive range of observations now available for the atmosphere and surface, changes in sea level, assesses the paleoclimatic perspective, climate change causes both natural and anthropogenic, and climate models for projections of global climate.
32,826 citations
Book•
01 Jan 2007TL;DR: In this article, the authors present an appropriate way to examine the economics of climate change, given the unique scientific and economic challenges posed, and suggest implications for emissions targets, policy instruments, and global action.
Abstract: �Greenhouse gas (GHG) emissions are exter nalities and represent the biggest market failure the world has seen. We all produce emissions, people around the world are already suffering from past emissions, and current emissions will have potentially catastrophic impacts in the future. Thus, these emissions are not ordinary, localized externalities. Risk on a global scale is at the core of the issue. These basic features of the problem must shape the economic analy sis we bring to bear; failure to do this will, and has, produced approaches to policy that are pro foundly misleading and indeed dangerous. The purpose of this lecture is to set out what I think is an appropriate way to examine the economics of climate change, given the unique scientific and economic challenges posed, and to suggest implications for emissions targets, policy instruments, and global action. The sub ject is complex and very wide-ranging. It is a subject of vital importance but one in which the economics is fairly young. A central challenge is to provide the economic tools necessary as
3,162 citations
Posted Content•
TL;DR: In this paper, the authors consider the problem of saving when consumers are not permitted to borrow, and the ability of such a theory to account for some of the stylized facts of saving behavior.
Abstract: This paper is concerned with the theory of saving when consumers are not permitted to borrow, and with the ability of such a theory to account for some of the stylized facts of saving behavior. When consumers are relatively impatient, and when labor income is independently and identically distributed over time, assets act like a buffer stock, protecting consumption against bad draws of income. The precautionary demand for saving interacts with the borrowing constraints to provide a motive for holding assets. If the income process is positively autocorrelated, but stationary, assets are still used to buffer consumption, but do so less effectively, and at a greater cost in terms of foregone consumption. In the limit, when labor income is a random walk, it is optimal for impatient liquidity constrained consumers simply to consume their incomes. As a consequence, a liquidity constrained representative agent cannot generate aggregate U.S. saving behavior if that agent receives aggregate labor income. Either there is no saving, when income is a random walk, or saving is contracyclical over the business cycle, when income changes are positively autocorrelated. However, in reality, microeconomic income processes do not resemble their average, and it is possible to construct a model of microeconomic saving under liquidity constraints which, at the aggregate level, reproduces many of the stylized facts in the actual data. While it is clear that many households are not liquidity constrained, and do not behave as described here, the models presented in the paper seem to account for important aspects of reality that are not explained by traditional life-cycle models.
1,730 citations
TL;DR: The authors analyzes the implications of structural uncertainty for the economics of low- probability, high-impact catastrophes and shows that the economic consequences of fat-tailed structural uncertainty (along with unsureness about high-temperature damages) can readily outweigh the effects of discounting in climate change policy analysis.
Abstract: With climate change as prototype example, this paper analyzes the implications of structural uncertainty for the economics of low- probability, high-impact catastrophes. Even when updated by Bayesian learning, uncertain structural parameters induce a critical "tail fattening" of posterior-predictive distributions. Such fattened tails have strong im- plications for situations, like climate change, where a catastrophe is theoretically possible because prior knowledge cannot place sufficiently narrow bounds on overall damages. This paper shows that the economic consequences of fat-tailed structural uncertainty (along with unsureness about high-temperature damages) can readily outweigh the effects of discounting in climate-change policy analysis.
1,575 citations
TL;DR: In this article, the authors discuss the theory of saving when consumers are not permitted to borrow, and the ability of such a theory to account for some of the stylized facts of saving behavior.
Abstract: This paper is concerned with the theory of saving when consumers are not permitted to borrow, and with the ability of such a theory to account for some of the stylized facts of saving behavior. The models presented in the paper seem to account for important aspects of reality that are not explained by traditional life-cycle models. Copyright 1991 by The Econometric Society.
1,446 citations