Climate change challenge: a new era for central banks? - Dominique Plihon

Central banks are the oldest financial institutions. Their functions and their policies have changed over time according to the historical context. The first central banks were created to finance wars. They also helped finance reconstruction in postwar periods. Three generations of central bankers have held office since the mid-20th century: during the postwar period, Keynesian central bankers fought simultaneously against inflation and unemployment in accordance with the Phillips curve; since the end of the 1970s, the priority of conservative central bankers has been low inflation. Recently, since the global financial crisis of 2008, the primary goal of central banks has been financial stability. Today central banks are facing another challenge: climate change and the energy transition. Could the next generation of central bankers to emerge be ecological and offer a new framework for monetary policy?