Carbon pricing would have ‘limited impact’ on eurozone inflation, says paper
Inflation would rise less than 0.2% per year until 2025 and then decline, researchers say
A higher carbon price would have a limited impact on eurozone inflation, according to research published by the European Central Bank on May 25.
“That means monetary policy would face only a modest trade-off in terms of stabilising inflation relative to output,” say the authors.
The research uses six macroeconomic models to assess the impact of raising carbon prices in the eurozone. And it assumes a carbon price increase from €85 ($91.4) in 2021 to €140 per tonne of CO2 emissions by 2030.
Acr
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