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Climate Change and Central Banks

Posted on:November 22, 2023 at 10:25 AM

EC916 Topics in Global Finance This illustration brings together the concepts of financial market dynamics, monetary policy, central banking, and environmental sustainability.

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Name of the Project Leader

Fatih Kansoy

Title of the Project

Empirical Finance: Central Bank Studies

Outline of the Project

The era of one policy objective –inflation targeting– and one tool – interest rates – is over for the central banks for the sake of financial stability. Today, there are many challenges that central banks have to face and climate crisis is at the top of the list. To deliver financial stability in a world that is now so financially interconnected poses fresh challenges such as climate risk and recent pandemic which affects the two policy goals pursued by central banks, financial and monetary stability. Central banks need to not just adapt to changing conditions but equip new tools too.

Apart from macroprudential tool central banks has another powerful tool: communication. Communication has become as important financial monitoring and management to effective central bank operations. If done well, communication can strengthen understanding of central bank objectives by market agent as well as public, help shape the market mood and provide reassurance in times of stress.

In this project, we are going to check and rank the communication channel and efficiency of central banks climate change policy over the world. Since, an effective communication can help to shape the view of public and increase the policy effectiveness. In this regard, for example, the Guardian newspaper has recently changed their language on climate matters, and they no longer use “climate change” but “climate crisis” since it is a crisis, not a change. In a similar manner, by using natural language processing method, we are going to rank the central bank according to their sensitivity of this issue.

Brief Description of Work

Intended Learning Outcomes and Work Benefits

Number of Vacant Positions

1 or 2

Total Hours

150

Hours per Position

75 or 150

Start Date

January 2024

End Date

September 2024

Who can apply?

Required Skills

Desired Skills