ECB steps up climate work with focus on green transition, climate and nature-related risks

While existing models have added a financial sector and real estate sector, they have largely overlooked housing supply.

Metadata
Provider: 
ECBECB
URL: 
https://www.ecb.europa.eu//press/pr/date/2024/html/ecb.pr240130~afa3d90e07.en.htmlhttps://www.ecb.europa.eu//press/pr/date/2024/html/ecb.pr240130~afa3d90e07.en.html
Retrieved on: 
Sunday, February 4, 2024
Information
Tags: 
Growth, European, Reproduction, Prejudice, European Central Bank, Environment, Climate change, Treaty, Annex, Carbon, Climate, Communication, Weather, Environmental resource management, Frankfurt, ECB, Insurance, Renewable energy
Geotags: 
LAGARDE, EUROPEAN UNION, GERMANY
Summary
Key Points: 
  • While existing models have added a financial sector and real estate sector, they have largely overlooked housing supply.
  • I develop an extended DSGE model that includes both the financial sector and endogenous housing supply and show that forecasting accuracy significantly improves when data on new houses is included.
  • The findings highlight the necessity of combining model extension and housing supply data for accurate forecasting during economic crises.
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