Researchers from Federal Reserve Bank Report on Findings in Investment (Green Stocks and Monetary Policy Shocks: Evidence From Europe): Investment

2025 AUG 04 (NewsRx) -- By a News Reporter-Staff News Editor at Economics Daily Report -- Current study results on Investment have been published. According to news reporting from San Francisco, California, by NewsRx journalists, research stated, “Policymakers and researchers, notably in Europe, have expressed concerns that the low-carbon transition may be inadvertently delayed by higher global interest rates. To examine whether green investment is especially sensitive to interest rate increases, we consider the effect unanticipated monetary policy changes on the equity prices of green and brown European firms.”

The news correspondents obtained a quote from the research from Federal Reserve Bank, “We find that brown firms, measured in terms of carbon emission levels or intensities, are more negatively affected than green firms by tighter monetary policy. This heterogeneity is robust to different monetary policy surprises, emission measures, econometric methods, and sample periods, and it is not explained by other firm characteristics.”

According to the news reporters, the research concluded: “This evidence suggests that higher interest rates may not skew investment away from a sustainable transition.”

This research has been peer-reviewed.

For more information on this research see: Green Stocks and Monetary Policy Shocks: Evidence From Europe. European Economic Review, 2025;177. European Economic Review can be contacted at: Elsevier, Radarweg 29, 1043 Nx Amsterdam, Netherlands. (Elsevier - www.elsevier.com; European Economic Review - http://www.journals.elsevier.com/european-economic-review/)

Our news journalists report that additional information may be obtained by contacting Michael D. Bauer, Federal Reserve Bank, San Francisco, CA 94105, United States. Additional authors for this research include Glenn D. Rudebusch and Eric A. Offner.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.euroecorev.2025.105044. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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