Low-Carbon Macro

Carsten Jung, Theresa Löber, Anina Thiel and Thomas Viegas

Governments have pledged to meet the Paris Target of restricting global temperature rises to ‘well below’ 2˚C.  But reducing CO2 emissions and other greenhouse gases means reallocating resources away from high-carbon towards low-carbon activities. That reallocation could be considerable: fossil fuels account for more than 10% of world trade and around 10% of global investment.  In this post, we consider the macroeconomic effects of the transition to a low-carbon economy and how it might vary across countries. While much of the discussion has focussed on the hit to economic activity and the potential for job losses in higher-carbon sectors, we highlight that the transition also offers opportunities. And the overall impact depends crucially on when and how the transition takes place.

Continue reading “Low-Carbon Macro”

Back to the future: why we’re optimists in the secular stagnation debate

Saara Tuuli & Sandra Batten

Seven years after the financial crisis, global growth remains anaemic and the policy setting is nowhere near normal.  Some commentators have suggested that this reflects some kind of ‘secular stagnation’ which set in before the crisis.  This would have profound consequences for future growth and development in both wealthy and poorer countries. We are more optimistic, and see a raft of emerging technologies that could transform growth in many sectors.  In this post, we summarise the current debate and offer our views on it.

Continue reading “Back to the future: why we’re optimists in the secular stagnation debate”