Financing the Green Transition: The Role of Green Bonds in Renewable Electricity Expansion

Assessing the advantages and drawbacks of government trading of guarantees of origin for renewable electricity in Europe

Abstract. Monetary policy is one of the important monetary subjects that can evaluate the performance of the policy and its tools, recent development in financial markets in the past years led to changes in the behavior of countries monetary policies, concentrated to achieve stability in the price level by creating new ideas of how monetary policy affects the economy and its components through linking macroeconomic activities (private spending components) with nominal interest rate. This study aims to analyze and evaluate the impact of Jordanian monetary policy on consumption and investment spending during the period (1989-2013) to predict the impact of monetary policy and its instruments on real economic activities and inflation. The study finds that lending rate affects investment negatively but it does not affect consumption and real GDP in the short run. However, in the long run investment is affected by the co-movements occurred in consumption lending rate and lagged investment. Also, the study finds that real GDP is affected by the co- movements that occurred in real GDP and lending rate. Furthermore, domestic credit is affected by the co-movements that happened in domestic credit and lending rate. Keywords. Consumption, Error correction model, Investment, Lending rate, Monetary policy. JEL. E20, F22, O23.

Monetary policy and stock returns: Financing constraints and asymmetries in bull and bear markets

This study aims to analysis the impact of fiscal and monetary policy in Indonesian economy by using Mundell Fleming (IS-LM-BOP) model. The main objective of this paper is to see the impact of fiscal and monetary policy to Indonesia Gross Domestic Product (GDP). Indonesia as a small open economy with imperfectly capital mobility, so temporary thesis of the Mundell-Fleming model is that monetary policy more effective than fiscal policy in improving of the GDP, that caused by its crowding out effect yielded from expansive\ fiscal policy. A variant of the Mundell Fleming model for the Indonesian economy is constructed and analysed using the Two Stage Least Square Methods (2sls). The result of two stage least square estimation indicating that the impact of monetary policy with money supply(M2) instrument is more effective in improving GDP than fiscal policy with government expenditure instrument . This result is proved with influences which are positive and significant among money supply (M2) variable and GDP from demand side. However, goverment expenditure variables give positive effect but not significant to the GDP. These finding support the Hypothesis of model Mundell-Fleming

The rapid increase in household leverage in China has led to potential financial risks and threatened socio-economic stability. In mitigating household debt risks, the effectiveness of monetary policy regulation varies significantly with differences in household financial literacy. Based on micro-level household financial data from China, this paper delves into the impact of monetary policy on household leverage and its underlying mechanisms and analyzes the role of financial literacy in the transmission of monetary policy. The findings reveal that expansionary monetary policy helps reduce household leverage, while contractionary monetary policy leads to an increase. Monetary policy affects household leverage through the “income effect,”“wealth effect” and “substitution effect.” Notably, low financial literacy amplifies the impact of contractionary monetary policy on leverage, whereas high financial literacy mitigates this effect. This paper suggests strengthening financial regulation and risk warning systems, optimizing the design of monetary policy transmission, promoting multi-tiered financial product supply, and deepening the promotion of financial literacy education to achieve an effective balance between “stable growth” and “risk prevention.”

Clean and low-carbon energy sources and technologies have emerged as a critical driver in delivering the energy transition and achieving net zero-carbon emissions. All energy sources and power systems produce greenhouse gases (GHGs) and hence they contribute to anthropogenic greenhouse gas emissions and resultant climate change besides contributing to other negative environmental impacts. Energy sustainability remains a major challenge globally due to current heavy reliance on depletable and polluting fossil fuels for most of global energy needs. This study examines the energy transition strategies and proposes a roadmap for sustainable energy transition for sustainable energy planning and grid electricity generation and supply in wake of commitments made by the world community to the Paris Agreement aimed at reducing greenhouse gas emissions and limiting the rise in global average temperature to 2oC and preferably 1.5oC above the preindustrial level and realisation of the sustainable development goal of the United Nations. The sustainable transition strategies typically consist of three major technological changes namely, energy savings on the demand side, generation efficiency at production level and fossil fuel substitution by various renewable energy sources and low carbon non-renewable sources like nuclear power and carbon emission reduction strategies like carbon capture and sequestration and a conversion from high carbon fossil fuels like coal and oil to natural gas which remains the cleanest fossil fuel. The study demonstrated that decentralised generation with application of both demand side management and behind the meter management (BTM) strategies are effective measures to increase the use of renewable energy resources which are often locally available leading to higher uptake of renewable energy sources and conversion of consumers to prosumers making the transition economically sustainable. Waste to energy options have a significant potential to contribute to the energy transition e.g. use of biowaste for biogas production, slaughterhouse waste biodigestion for biogas and electricity generation and waste treatment and disposal, waste heat recovery from used geothermal for extra power generation and reinjection to improve the reservoir sustainability and use of bagasse and sugarcane trash for grid-based power production in sugar factories. Therefore, domestic, and industrial scale waste to energy conversion can enhance the economic sustainability of waste management process by offering useful energy substitutes for fossil fuels and enhanced energy security through decentralisation of generation. Whereas sustainable development has social, economic, and environmental pillars, energy sustainability is best analysed by five-dimensional approach consisting of environmental, economic, social, technical, and institutional/political sustainability to determine energy resource sustainability. The study recommends the adoption of sustainability-based planning for energy development and optimisation of electricity generation and supply where energy sources are analysed and ranked based on the five dimensions of energy sustainability instead of Least Cost Development Planning (LCDP) often applied by many countries. On this basis, the sustainable energy transition and optimisation of power generation will rely on both renewable and non-renewable energy since both have an important role in the realisation of the energy transition plans even though the desire is to shift entirely to renewable energy sources by the year 2050. The sustainability of various energy sources was assessed with hydrogen, wind, solar, sugarcane bagasse and cane trash, biogas and ocean energy technologies proving to be among the most sustainable renewable energy and sustainable sources. The study also examined various power plants and energy conversion systems for electricity generation in terms of their specific role and potential in grid-based power generation with hydro power plants, geothermal, nuclear, fuel cells, raking high on performance indicators like load and capacity factors making them ideal for base load power supply. Diesel engines and gas turbines using cogeneration and dual cycle systems powered by cleaner fuels like natural gas, hydrogen and biomethane will play an important role in supplying intermediate and peak load power. The study highlighted enabling technologies and concepts in the energy transition which include decentralisation of generation, cogeneration and trigeneration, demand side and behind the meter management microgrids and smart grid technologies, energy and generation planning and optimisation models, energy storage, electrification of transport and use of electric cars as decentralised electricity sources through the V2X technologies like the G2V and V2G, and carbon capture and sequestration for emissions reduction in fossil fuel power plants making them more sustainable. The study classifies electric vehicles as distributed power plants and variable loads with extensive use of energy storage while sugar cane bagasse is noted as a sustainable energy resource for power generation by cane sugar factories by application of more efficient grid connected cogeneration power plants. The study identified long project gestation period as the main factor limiting nuclear and geothermal energy deployment and recommends the adoption of modularised wellhead generators and small modular nuclear reactors (SMRs) as a solution to enhance exploitation of these sustainable energy and technologies through faster deployment with high degree of flexibility. Biogas and biomethane demonstrated significant potential as renewable energy sources for power generation and substitute fuels in all applications of fossil natural gas. The study recommends sustainability-based planning for the energy sector and power generation and use of both renewable and non-renewable but sustainable sources of energy, adoption of smart energy concept by all sectors and investment in energy technology and infrastructure development for hydrogen and other promising energy sources like ocean thermal, wave and tidal energy and the conversion of the transition from the traditional to smart grid systems and a shift from centralised to decentralised power generation. Since the transport sector accounts for a significant portion of the global greenhouse gas emissions, electrification of the transport sector and coupling with the power sector is a key strategy recommended for the transition with the smart grid and microgrids playing an enabling role. Since energy sources and generation technologies have associated emissions occurring at different sections of the lifecycle, the use of lifecycle costs and emissions are helpful in long term energy and generation planning which demonstrate that renewable sources and nuclear are the most sustainable when analysed within the five dimensions of energy sustainability, but with the non-renewable sources playing a critical role as dispatchable sources for sustainable grid power generation, while the smart grids and use of energy storage can increase the uptake of variable renewables to as high as 95% to 100% up from a low of 20-25% uptake of variable renewables with the traditional grid. This will significantly help the world in achieving the global emissions and climate targets as. stipulated in the Paris Agreement as well as the sustainable development goals (SDGs). Graphical Abstract The overall objective of the study was to provide solutions to build global energy systems based on renewable and sustainable energy resources and optimise power generation and consumption by use of sustainable energy resources and generation technologies based on the five dimensions of energy sustainability. A sustainable energy system should intergrade electricity and other sectors through smart electricity grids, smart gas grids and smart heat grids as demonstrated below.

Unlocking sustainable development: Evaluating the impact of monetary and fiscal policies on ecological footprint in India

Relevance of the research topic. In the context of financial globalization, it is important to determine the impact of monetary policy on budgetary balance, ensure sustainable economic development, and support macroeconomic equilibrium in the country. The study of the impact of monetary policy on a balanced budget is very relevant. Formulation of the problem. Under the conditions of transformational changes, the exchange rate and the peculiarities of its formation are an integral part of ensuring the development of the country's financial system. Of particular importance is the issue of ensuring the effective interaction of monetary and budgetary policies as one of the most important factors in the development of the economy through reindustrialization and modernization. Analysis of recent research and publications. The problem of the state’s monetary policy is today quite relevant for most countries of the world and widespread in the scientific works of famous foreign and domestic scientists: T. Bogolib, V. Heyets, I. Zapatrina, J. M. Keynes, N. Kornienko, A. Laffer, I. Lyutyi, A. Mazaraki, R. Masgrayev, V. Makogon, V. Oparin, M. Pasichnyi, A. Smith, J. Stiglitz, V. Fedosov, I. Chugunov, S. Yurii and others. Selection of unexplored parts of the general problem. However, there are a number of insufficiently disclosed issues regarding the impact of exchange rate fluctuations on significant macroeconomic indicators in the context of economic transformation. Setting the task, the purpose of the study. The objective of the study is to analyze the impact of the exchange rate on budgetary balance. The aim of the study is to determine the main objectives of the monetary policy of Ukraine. Method or methodology for conducting research. The article uses a set of scientific methods: the system approach, statistical analysis, structuring, analysis and synthesis. Presentation of the main material (results of work). The article analyzes the exchange rate and determines its effect on the formation of the budget deficit and public debt. The task of modern monetary and foreign exchange policy is delivered, directions of ensuring effective interaction of monetary and budget policies are considered. The field of application of results. The results of this study can be applied in the process of formation and implementation of the monetary policy of Ukraine. Conclusions according to the article. Maintaining balance and stability of budgets of various levels is a strategic objective of budget policy, especially in the context of transformational changes. Budget balance is characterized by the ratio of budget expenditures and revenues, their proportional change in economic uncertainty. It is important to ensure the effective interaction of monetary and budgetary policies as one of the most important factors in the development of the economy through reindustrialization and modernization. The solution of these issues involves an objective assessment of the situation in the domestic and world economies, taking into account the country's real capabilities in achieving the main strategic goals and ensuring economic development.

Purpose: This study investigates the impact of US and Kuwait monetary policy on the Kuwait Stock Exchange (KSE). Study design/methodology/approach: Our study employs an event study approach focused on Federal Open Market Committee (FOMC) announcement dates to analyze the impact of US and Kuwait monetary policy on the Kuwait Stock Exchange. By utilizing futures markets, we distinguish between the expected and unexpected components of these announcements.Sample and data: A time series dataset of KSE main indices between 2012 and 2024. Results: US monetary policy strongly impacts KSE, which is predominantly driven by the anticipated component of monetary policy change. KSE is responsive to the unanticipated component predominantly for information shock samples. KSE became more responsive to monetary policy after privatization in 2018. The Premier Market segment is more responsive to monetary policy impact than the Main Market segment. Monetary policy has a different effect and is not uniform among the various industries within KSE. Finally, Kuwait’s monetary policy does not have the same impact on KSE as US monetary policy. Originality/value: Our paper is the first to examine the impact of monetary policy on KSE by decomposing monetary policy changes into expected and unexpected components. We further decompose shocks into monetary or information shocks. We contribute to understanding the interactions between monetary policy and equity markets in emerging economies. Research limitations/implications: The study’s findings show that KSE efficiently processes public information and is responsive to US fed rate changes rather than local discount rate changes.

How to quantitatively measure the macro dynamic effect of monetary policy is one of the most critical issues in the mainstream macro research （Benanke and Gertler, 1995; Christiano, et al., 1999）. In the context of global financial integration, how will a country’s monetary policy affect the macroeconomy of other countries? This international spillover effect of monetary policy has been hotly debated in the academy, but it has not yet been conclusive. The reason is that, empirically, how to identify the impact of exogenous monetary policy has not been well resolved at the technical level; theoretically, mainstream macroeconomic models provide various transmission mechanisms, and no consensus has been reached.Due to the above difficulties, research on the international spillover effect of monetary policy is still in its early stage, and the impact of US monetary policy on China’s economy is seldom studied. From the empirical point of view, this article follows the latest literature Barakchian and Crowe （2013, hereinafter referred to as BC） to identify the impact of exogenous monetary policy in the United States, and studies the dynamic impact of US monetary policy on China’s macroeconomy and its underlying transmission mechanism. This article provides new evidence on the international spillover effect of monetary policy and also tests the existing theories in international economics from an empirical perspective.The primary issue to be addressed in monetary policy research is how to identify exogenous monetary policy shocks. However, macroeconomic regulation often relies on the current situation of aggregate economy. Since there is a strong endogenous relationship among economic variables, it is difficult to directly construct a system that includes policy variables and macroeconomic indicators to identify exogenous monetary policy shocks. To this end, BC （2013） solves the endogenous issue regarding the identification of monetary policy shocks. The exogenous shock constructed through their indicator not only avoids making ad hoc assumptions about the feedback rules of monetary policy, but also avoids the endogenous problems and the sample selection issue in traditional identification methods.Based on the US monetary policy shock constructed by BC （2013）, this article studies the spillover effect of US monetary policy on China’s macroeconomy and therefore solves the aforementioned endogenous problem of monetary policy shocks. The basic model of the empirical analysis is a three-variable structural vector autoregressive error correction model （SVECM） that includes China’s industrial output, price index, and US monetary policy shocks. Based on this model, we find that the opening-up policy of WTO accession at the end of 2001 has a significant structural impact on the spillover effect of US monetary policy and its transmission mechanism. Specifically, we divide the monthly data from 1996−2008 into two sub-samples before and after January 2002. Using the 2002−2008 subsample, we find that the impact of the US’s tightening monetary policy significantly causes China’s output to rise and prices to fall, thus performing as a positive supply shock to China’s economy. Based on the 1996−2001 subsample, US monetary policy will not have a significant impact on China’s economy. The above findings are largely different from the findings in Kim （1999, 2001）, Canova （2005）, and among others.In the analysis of the transmission mechanism, this article finds that the price channel can well explain the stylized facts in the data. Our theory proceeds as follows: The US tightening monetary policy will lead to the appreciation of the US dollar, which will cause US manufacturers to lower their export prices in US dollars （Exchange Rate Pass-Through）. Due to the yuan-dollar fixed exchange rate system, China’s import prices will decline, and the prices of domestic raw materials and CPI will decline. Lower production costs lead manufacturers to increase production, which is reflected by an increase in China’s output. Therefore, the price channel indicates that the US tightening monetary policy is equivalent to a positive supply shock, which will simultaneously increase China’s output and reduce the price level. Based on the extended SVECM system, we find that Chinese macro data can identify the price channels of imported goods. Further robustness analysis shows that our main findings are robust to different sample periods and different model settings. Besides, in order to better explain the identification of import price channels, we have conducted empirical tests on several standard theories in international economics. The results show that the standard theories fail to explain the Chinese data. Therefore, the price channel provides the primary transmission mechanism of the spillover effect of US monetary policy on China’s economy, and this channel also explains the empirical finding that WTO has a structural impact on the spillover effect.

Housing and the changing impact of monetary policy

Assessing potential spillovers from monetary policy measures implemented by the European Central Bank has become an important concern in a globalized world. The interest in studying the impact of monetary policies adopted by the ECB on the non-Euro area countries has grown over time, and this crisis caused by the COVID-19 pandemic is a suitable moment to continue the analysis of other authors. The research focuses on the four CEE countries that are European Union members, but not EMU participants - Czech Republic, Hungary, Poland and Romania. The paper sheds light on the impact of the monetary policy implemented by the ECB on the emerging economies from the non-Euro area. The empirical analysis has been carried out on monthly data between 2010 and 2021. The econometric model includes five endogenous variables such as industrial production, inflation rate, real effective exchange rate, unemployment rate and 3-month interest rate, and three exogenous variables including 3-month EURIBOR rate, total assets of the European Central Bank and VSTOXX index. The paper applies a Bayesian VAR model to estimate the spillover effects from the ECB’s monetary policy and to demonstrate the efficiency of the contractionary monetary policy implemented by the national central banks in each country, using a consistent set of endogenous and exogenous variables. To confirm the obtained results in the estimation of the impact of the monetary policy adopted by each national central bank, a Panel VAR model was estimated. Extant results showed that the responses to an exogenous shock from the monetary policy adopted by the ECB are weak and statistically insignificant. This outcome led the analysis to a further estimation of the impact of the monetary policy implemented by the national central banks from each country, in order to make a comparison between the monetary policy of the Eurozone and the monetary policy adopted by the four emerging countries.

This study investigates the impact of bank capital, capital structure and monetary policy on the lending behavior of USA banks before and after global financial crises. For this purpose, sample data is collected from the annual reports of top ten banks of USA from 2001 to 2017. A panel unit root is applied to check the stationarity of variables. In order to explain the impact of bank capital, capital structure and monetary policy on lending behavior of USA banks, fixed effect and random effect model have been used. The sample data has been divided into two sets. First data set is taken from 2001 to 2008 before financial crises. Second data set is taken from 2009 to 2017 after financial crises and all above tests have been applied on these data sets. Furthermore, in order to measure the lending behavior three types of lending have been selected lending to consumers, lending to real estate and lending to commercial & industrial sector of USA banks. In order to get the better picture of lending behavior of USA banks before and after financial crises: paired sample T-test has been applied on the data of lending before and after financial crises. Results of paired sample T-test showed there is significant difference in lending to consumers, lending to commercial & industrial sector and lending to real estate before and after financial crises of USA banks because of the implementation of Basel III. So, we accept the alternative hypothesis for our second research question. Findings suggested that impact of bank capital, capital structure and monetary policy has significant impact on the lending behavior before and after the global financial crises with the positive change of sixteen percent in R-squared value. So, we accept the alternative hypothesis for our first research question. The results of coefficients shows that before financial crises (2001 to 2008) discounted interest rates have more significant impact on the lending made to consumers but after the global financial crises (2009 to 2017) discounted interest rates, capital structure and tier 1 capital ratio have more significant impact on the loan made to consumers. The results of coefficients shows that before the financial crises (2001 to 2008) discounted interest rates have more significant impact on the loan made to commercial and industrial sector but after the global financial crises (2009 to 2017) discounted interest rates, capital structure and tier 1 capital ratio have more significant impact on the loan made to commercial and industrial sector. The results of coefficients shows that before financial crises (2001 to 2008) discounted interest rates have more significant impact on the loan made to real estate but after the global financial crises (2009 to 2017) discounted interest rates and capital structure have more significant impact on the loan made to real estate. Findings of our study are aligned with Swamy (2015), who investigated the impact of bank capital on lending spreads and found that increase in capital ratio of banks would also increase their lending spreads. Our results are also matched with the findings of (Kosak et al., 2015), those concluded that capital structure significantly affect the loan growth of banks. Our results are also aligned with Chami & Cosimano (2010), they found that change in monetary policy due to Basel Accord would lead to a change in bank capital and bank loans.

WITHDRAWN: the Impact of Monetary Policy on the Liquidity of Bond Market——Based on Chinese Local Government Bond Market

This research study investigates the impact of monetary policy on economic growth in Nepal. Data was taken from the sources of national account of World Bank from the year 1965 to 2020 for this purpose. Augmented Dickey- Fuller unit root test was performedto avoid spurious regression. Johansen co-integration test was applied after conforming all variables were integrated in order I (1) then Vector Error Correction model was used to find out the speed of adjustment towards long run equilibrium. The coefficient of VECM was negative and significant that shows long run relationship between monetary policy and GDP Growth. Granger Causality results show two-way causality between money supply andGDP Growth. The result supports the impact of monetary policy on economic growth of the country. It can reduce unemployment, promote investments and stabilize the economy so monetary authorities and policy makers should focus on healthy monetary policy for economic growth of the country.