As part of the green transition, the European cap-and-trade scheme for CO2 emissions will be extended to cover consumer durables. We propose a New Keynesian model that features both, "brown" and "green" durable goods and show that if monetary policy follows a business-as-usual approach, the...

Central banks can play a key role in the change in finance needed for the green transition, but green central bank measures may also have an impact on the general public's trust in the institution. Trust, in turn, is crucial for central banks to successfully conduct monetary policy. The...