Beyond emissions: the interplay of macroprudential regulation and climate policy
BankUnderground
NOVEMBER 8, 2023
In a new working paper , we show that cap-and-trade schemes lead to lower volatility in GDP and financial variables, and result in reduced welfare costs of the business cycle , when compared to the more widely known carbon taxes. As a result, the respective macroeconomic effects of the two policies remain a point of debate.
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