Mark Carney on Central Banking and Shared Values | Podcast Summary

Mark Carney on Central Banking and Shared Values | Conversations with Tyler

In a thought-provoking conversation with Tyler Cowen, Mark Carney, a renowned Canadian economist and former Governor of the Bank of England, delves into the significance of shared values in tackling complex issues like climate change and economic recovery post-COVID-19.

He also sheds light on the role of central banks in these scenarios and the necessity for innovation in monetary policy.

Economic Impact of Climate Change

The potential economic impact of climate change could be significant, with estimates of a base case of 5-6% of global GDP, with possible risks of up to 20-30%.

Central banks can use this information to assess the potential asset price effects of climate change on commercial real estate, fossil fuel assets, and other investments.

Central Banks’ Role in Climate Change

Central banks are not special adjudicators of wisdom about climate change.

Instead, they can use information about the potential economic impact of climate change to assess the potential risks to the financial system and take appropriate action.

Hierarchical Nature of Central Banks

The hierarchical nature of central banks is a significant challenge.

It is important to empower individuals within the organization to voice their opinions and give clear advice.

Central banks should also have Chief Operating Officers to handle the day-to-day operations.