The Macroeconomic Effects of Climate Policy Uncertainty
We develop a novel measure of climate policy uncertainty based on newspaper coverage. Our index spikes during key U.S. climate policy events—-including presidential announcements on international agreements, congressional debates, and regulatory disputes—-and shows a recent upward trend. Using an instrument for plausibly exogenous uncertainty increases, we find that higher climate policy uncertainty decreases output and emissions while raising commodity and consumer prices, acting as supply rather than demand shocks. Monetary policy counteracts these inflationary pressures, affecting the transmission of climate policy uncertainty. Firm-level analyses show stronger declines in investment and R&D when firms have higher climate change exposure.
Date:
4 March 2025, 13:15
Venue:
Manor Road Building, Manor Road OX1 3UQ
Venue Details:
Seminar Room A
Speaker:
Diego Kanzig (Northwestern University)
Organising department:
Department of Economics
Part of:
Macroeconomics Seminar
Booking required?:
Not required
Audience:
Members of the University only
Editor:
Edward Clark
