Two significant barriers associated with green energy projects are a lower rate of return compared to fossil fuel projects and a higher risk of investment compared to fossil fuel projects. The difficulty accessing external financing is also one of the main obstacles to green production. This study aims to develop an environmental dynamic stochastic general equilibrium (E-DSGE) model with banks and heterogeneous production sectors and evaluate the effects of monetary and fiscal policy on green production and emission. We estimate the model for the Indonesian economy and assess the effects of macroeconomic uncertainty in terms of productivity, monetary, fiscal policy, and financial shocks in a setup that includes policies supporting green firms.

This study is conducted with Arnita Rishanty (Bank Indonesia) and Nur M. Adhi Purwanto (Bank Indonesia)

Speaker:
Sekar Utami Setiastuti (Department of Economics, Universitas Gadjah Mada)

Friday, 25 February 2021 at 13.30-15.00WIB

Participate on Zoom (registration needed): https://bit.ly/fkp25feb
or YouTube bit.ly/fkp-live

Thumbnail photo by Johnny Chen on Unsplash