Natural disaster

Ecology

Biology

Social psychology

Archaeology

Economics

Biochemistry

Business

Multitude

CLARITY

Climate change

Psychology

Politics

Geography

Political science

Economic policy

Natural (archaeology)

Temptation

Chemistry

Meteorology

Credibility

Journal of Monetary Economics

Climate change poses an important policy challenge for governments around the world. The challenge is made all that much more difficult because of the multitude of potential policymakers involved in setting the policy worldwide. What then should be the role of central banks? How are climate change concerns similar to or distinct from those of other natural disasters? Clarity of ambition and execution will help to ensure that central banks maintain credibility. By adhering to their mandated roles, they retain their critically important distance from the political arena. Their credibility will be further enhanced by avoiding the temptation to exaggerate our understanding of climate change.

Central banking challenges posed by uncertain climate change and natural disasters