Climate Change: Implications for Macroeconomics

May 13, 2022
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


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.

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?


Daron Acemoglu
MIT Institute Professor

Tatyana Deryugina
Associate Professor of Finance
University of Illinois Urbana-Champaign

Lars Peter Hansen
The David Rockefeller Distinguished Service Professor
University of Chicago

Solomon Hsiang
Chancellor’s Professor of Public Policy
University of California, Berkeley, and Global Policy Laboratory

Monika Piazzesi
Joan Kenney Professor of Economics
Stanford University

Esteban Rossi-Hansberg
The Glen A. Lloyd Distinguished Service Professor
University of Chicago

James Stock
Harold Hitchings Burbank Professor of Political Economy
Harvard University

Iván Werning




Rajashri Chakrabarti, Marco Del Negro, Julian di Giovanni and Laura Pilossoph




For logistical inquiries, please contact ny.researchconference@ny.frb.org


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