Environmental and Resource Economics

, Volume 67, Issue 4, pp 823–851 | Cite as

GHG Emissions Control and Monetary Policy

Article

Abstract

This paper examines the optimal environmental and monetary policy mix in a New Keynesian model embodying pollutant emissions, abatement technology and environmental damage. The optimal response of the economy to productivity shocks is shown to depend crucially on the instruments policy makers have available, the intensity of the distortions they have to address (i.e. imperfect competition, costly price adjustment and negative environmental externality) and the way they interact.

Keywords

GHG emissions control policy Monetary policy Ramsey problem 

JEL Classification

Q58 E32 E52 

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Copyright information

© Springer Science+Business Media Dordrecht 2016

Authors and Affiliations

  1. 1.Università di Roma Tor VergataRomeItaly
  2. 2.Sogei S.p.A.RomeItaly

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