Investigating the Long-Run Effects of Monetary Policy on Climate Change: Evidence from Türkiye

Authors : Elif Duygu Kömürcüoğlu

Pages : 314-335

Doi:10.54733/smar.1701472

View : 141 | Download : 156

Publication Date : 2025-07-29

Article Type : Research Paper

Abstract :The effects of global climate change on the economy have made environmental sustainability an essential element of macroeconomic policy frameworks. In recent years, while the position of central banks in combating climate change has been discussed, the consequences of monetary policy implementations in terms of climate change have become increasingly prominent in the literature. The aim of this study is to analyse the effects of monetary policy implementations on climate change in Türkiye. In the study spanning the period 1990-2023, short- and long-run effects are investigated by means of ARDL bounds test and causality relationships between variables are analysed by Toda-Yamamoto test. The findings reveal that monetary expansion triggers climate change in Türkiye. Moreover, causality analyses suggest that there is a bidirectional relationship between the variables. In accordance with these results, it is of utmost importance to design policies by prioritising the effects of monetary policy on environmental sustainability. The central bank may incorporate climate-friendly green monetary policy instruments into its strategies while pursuing its main objective of price stability.
Keywords : iklim değişikliği, para politikası, yeşil para politikası, ARDL

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