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ORCID

Łukasz Kurowski:0000-0002-3306-4276

Keywords

climate change, monetary policy, inflation report, text mining

Abstract

Global warming poses many challenges for all economic entities. The two main challenges facing all countries are climate change mitigation and adaptation. Central banks also face difficult tasks in this context. The difficulty stems from the impact of climate change on all sectors of the economy. Central banking has to deal with the new challenges created by climate change for monetary policy, macroprudential policy, but also climate education. The aim of the article is to verify to what extent climate change is considered in the central bank’s main objective – monetary policy. Therefore, the article examines the frequency with which central banks refer to climate issues in their inflation reports. Applying a text mining approach to the analysis of 459 inflation reports published by 10 central banks from post-communist countries between 2013 and 2023 confirms that climate issues make up a small part of inflation reports. On the positive side, the frequency of central banks’ references to climate issues increased after 2022 (in particular, the frequency of words in the area of transition risks). The study also found that the challenges of climate change are motivating central banks to take various actions to spread climate education in society. The trends identified point to an urgent need for central banks to pay more attention to climate risks in their activity – monetary policies, prudential policies and climate education.

Acknowledgments

Funding The research received no funds.
Declaration of Conflicting Interests The author declared no potential conflicts of interest with respect to the research, authorship, and publication of the article.
Declaration about the scope of AI utilization The authors did not use an AI tool in the preparation of the article.

First Page

29

Last Page

41

Page Count

13

Received Date

30.06.2024

Revised Date

24.07.2024

Accept Date

30.07.2024

Online Available Date

29.08.2024

DOI

10.7172/2353-6845.jbfe.2024.1.3

JEL Code

E52; E58; I2; Q54

Publisher

University of Warsaw

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