Working Papers present research work by both Danmarks Nationalbank’s employees and our partners. Working Papers are primarily targeted at professionals and people with an interest in central banking research as well as economics and finance in a broader sense.
Consumer Durables, Monetary Policy, and the Green Transition
As part of the green transition, the European cap-and-trade scheme for CO2 emissions will be extended to cover consumer durables. Using a New Keynesian model with durable consumption goods, we analyse the trade-off for monetary policy during the green transition: pursuing a strict inflation target will potentially slow the green transition.