On May 13, 2022, the Federal Reserve Bank of New York hosted a virtual Symposium on “Climate Change: Implications for Macroeconomics”. The goal of the Symposium, which was organized by the Applied Macroeconomics and Econometrics Center of the Federal Reserve Bank of New York, was to stimulate a thought-provoking debate on the topic of climate change and its implications for the macroeconomy. The Symposium brought together both academics and policymakers to discuss four key topics: the implications of climate change for monetary policy; labor and capital reallocation due to climate change and associated policies; climate change, trade, and global production; and climate uncertainty, financial markets, and the natural rate of interest. Since research on many of these topics is still nascent, panelists explored the key questions, ideas, and fruitful research avenues in this important field.
watch the event
Session I
Session II
Session III
Session IV
Event Details
Date & Time
May 13, 2022
10:00 AM-3:05 PM EDT
May 13, 2022
10:00 AM-3:05 PM EDT
Audience
This event was open to the public and media virtually. All remarks were on the record and the event was recorded. For Media inquiries, please contact Mariah Measey at mariah.measey@ny.frb.org.
Agenda
Each one-hour session included two 15-minute presentations followed by a 30-minute roundtable discussion.
| 10:00am-10:05am | Opening Remarks Rajashri Chakrabarti, Federal Reserve Bank of New York |
| 10:05am-11:05am | Session I: Implications of Climate Change for Monetary Policy James H. Stock, Harvard University Presentation Iván Werning, MIT Presentation What are the likely consequences of climate change and climate policy for the macroeconomy in terms of long-term productivity as well as the volatility of output growth and inflation? Will the unpredictability related to climate change and/or climate policy usher in a new “cost push shock” era, different from the pre-COVID economy where shocks rarely involved tradeoffs for the monetary authority? Does monetary policy, both traditional interest rate policy and QE, have direct or indirect effects on climate change, possibly via its impact on risk premia? What macroeconomic risks associated with climate change should a central bank especially monitor? |
| 11:10am-12:10pm | Session II: Labor and Capital Reallocation and Climate Change Daron Acemoglu, MIT Presentation Tatyana Deryugina, University of Illinois Urbana-Champaign Presentation Climate change and related policies will bring about reallocation of both labor and capital across sectors and geographical regions. To what extent will this reallocation affect aggregate outcomes, such as the natural rate of unemployment u*? Will it affect inequality across and within demographic groups? What are the macroeconomic implications of any such changes? |
| 12:10pm-1:00pm | Lunch |
| 1:00pm-2:00pm | Session III: Climate Change, Trade, and Global Production Solomon Hsiang, University of California, Berkeley, and Global Policy Laboratory Presentation Esteban Rossi-Hansberg, University of Chicago Presentation How will climate change shift economic activity within, across, and between countries? What is the potential impact of climate policy on the global supply chain? What are the implications for monetary policy makers? |
| 2:05pm-3:05pm | Session IV: Climate Uncertainty, Financial Markets, and the Natural Rate of Interest Lars Peter Hansen, University of Chicago Presentation Monika Piazzesi, Stanford University Presentation How will climate change and policy-related uncertainty impact financial markets and in turn affect the macroeconomy via risk premia, the demand for safe assets, and the natural rate of interest? How will they impact households’ and firms’ savings and investment decisions? What could be the effects on the housing market? What could be the distributional consequences of these developments? |
Speakers
MIT Institute Professor
MIT
Associate Professor of Finance
University of Illinois Urbana-Champaign
The David Rockefeller Distinguished Service Professor
University of Chicago
Chancellor’s Professor of Public Policy
University of California, Berkeley, and Global Policy Laboratory
Joan Kenney Professor of Economics
Stanford University
The Glen A. Lloyd Distinguished Service Professor
University of Chicago
Harold Hitchings Burbank Professor of Political Economy
Harvard University
Professor
MIT
organizers
Rajashri Chakrabarti, Marco Del Negro, Julian di Giovanni and Laura Pilossoph
contact
For logistical inquiries, please contact ny.researchconference@ny.frb.org
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