A note on the role of monetary policy when natural gas supply is inelastic

Alfons J. Weichenrieder

This note argues that in a situation of an inelastic natural gas supply a restrictive monetary policy in the euro zone could reduce the energy bill and therefore has additional merits. A more hawkish monetary policy may be able to indirectly use monopsony power on the gas market. The welfare benefits of such a policy are diluted to the extent that some of the supply (approximately 10 percent) comes from within the euro zone, which may give rise to distributional concerns

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Year of publication:	2022
Authors:	Weichenrieder, Alfons J.
Publisher:	Frankfurt am Main : Universitätsbibliothek Johann Christian Senckenberg
Subject:	Geldpolitik \| Monetary policy \| Erdgasmarkt \| Natural gas market \| Erdgas \| Natural gas \| Theorie \| Theory \| Gaswirtschaft \| Gas industry \| Gasversorgung \| Gas supply

Extent:	1 Online-Ressource
Series:	SAFE working paper ; No. 360
Type of publication:	Book / Working Paper
Language:	English
Other identifiers:	10.2139/ssrn.4233057 [DOI]
Classification:	E52 - Monetary Policy (Targets, Instruments, and Effects) ; Q31 - Demand and Supply
Source:	ECONIS - Online Catalogue of the ZBW

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