Documents Mazzocchetti, Andrea 2 results

"In this paper we discuss some of the monetary policy issues that have involved major central banks worldwide since the 2008 financial crisis, and which remain open. We provide an ex-cursus of the unconventional monetary policies adopted by central banks in the last decade, focusing on the European Central Bank and the Federal Reserve, and we discuss the rationale and efficacy of some unconventional monetary instruments, of inflation targeting and of central bank independence. We also provide a perspective on possible future developments of monetary policy. We argue that while unconventional monetary policy was useful, there is still ample space for improvement: in the recessions to come, unconventional monetary policy will need to be better coordinated with fiscal, micro- and macro-prudential policies to provide more inclusive results that might positively affect the real economy beyond the financial system."

"The analysis of the conditions under which, and extent to which climate-adjusted financial risk assessment affects firms' investment decisions in the low-carbon transition, and the realisation of the climate mitigation trajectories, still represent a knowledge gap. Filling this gap is crucial to assess the “double materiality” of climate-related financial risks. By tailoring the EIRIN Stock-Flow Consistent model, we provide a dynamic balance sheets assessment of climate physical and transition risks for the euro area, using the climate scenarios of the Network for Greening the Financial System (NGFS). We find that an orderly transition achieves important co-benefits already in the mid-term, with respect to carbon emissions abatement, financial stability, and economic output. In contrast, a disorderly transition can harm financial stability, thus limiting firms' capacity to invest in low-carbon activities that could decrease their exposure to transition risk and help them recover from climate physical shocks. Importantly, investors' climate sentiments, i.e. their anticipation of the impact of the carbon tax across NGFS scenarios, play a key role for smoothing the transition in the economy and finance. Our results highlight the importance for financial supervisors to consider the role of firms and investors' expectations in the low-carbon tran"sition, in order to design appropriate macro-prudential policies for tackling climate risks.