A joint decision for a greener economy may enable us to better manage the timing of an economic adjustment, minimizing uncertainty and volatility, opening up new paths for growth. However, the transition will not be without difficulties and decisions on monetary policy in any case remain very intricate. Even if an agreement was found to slow global warming, the “temperature” in central banks remains very high.
During Mario Draghi’s recent visit to the Harvard Kennedy School, the impact of the US shutdown, the Fed’s approach to tapering, and Europe’s fragile recovery all featured in discussions with faculty and students. Below are the key points to emerge from the conversation.