Business Cycles and Environmental Policy: Literature Review and Policy Implications

63 Pages Posted: 19 Jul 2021 Last revised: 28 Oct 2024

See all articles by Barbara Annicchiarico

Barbara Annicchiarico

Roma Tre University - Department of Law

Stefano Carattini

Georgia State University

Carolyn Fischer

World Bank Group

Garth Heutel

Georgia State University

Date Written: July 2021

Abstract

We study the relationship between business cycles and the design and effects of environmental policies, particularly those with economy-wide significance like climate policies. First, we provide a brief review of the literature related to this topic, from initial explorations using real business cycle models to New Keynesian extensions, open-economy variations, and issues of monetary policy and financial regulations. Next, we provide a list of the main findings that emerge from this literature that are potentially most relevant to policymakers, including the impacts of policy on volatility and how to design policy to adjust to cycles. Finally, we propose several important remaining research questions.

Suggested Citation

Annicchiarico, Barbara and Carattini, Stefano and Fischer, Carolyn and Heutel, Garth, Business Cycles and Environmental Policy: Literature Review and Policy Implications (July 2021). NBER Working Paper No. w29032, Available at SSRN: https://ssrn.com/abstract=3889139

Barbara Annicchiarico (Contact Author)

Roma Tre University - Department of Law ( email )

Via Ostiense 163
Roma, RM 00154
Italy

Stefano Carattini

Georgia State University ( email )

35 Broad Street
Atlanta, GA 30303-3083
United States

Carolyn Fischer

World Bank Group

10 Marina Boulevard
Marina Bay Financial Center, Tower 2, #34-02
Singapore, DC 018983
Singapore

Garth Heutel

Georgia State University ( email )

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