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The macroeconomic effects of a greener technology mix

Author

Listed:
  • Fabrizio Ferriani

    (Bank of Italy)

  • Andrea Gazzani

    (Bank of Italy)

  • Filippo Natoli

    (Bank of Italy)

Abstract

What are the macroeconomic implications of shifting to greener technologies in the transition towards a low-emission economy? We identify shocks to the composition of US innovation entailing a shift towards greener technologies by exploiting granular data on the universe of patents granted in the United States. The rebalancing towards green technology is costly in the short run – lowering output and raising inflation – but Pareto-improving in the medium run, when the recessionary effects dissipate, the emissions intensity of output declines persistently, and energy production shifts towards renewables. These effects are independent of variations in national and international climate policy commitments.

Suggested Citation

  • Fabrizio Ferriani & Andrea Gazzani & Filippo Natoli, 2025. "The macroeconomic effects of a greener technology mix," Temi di discussione (Economic working papers) 1482, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:wptemi:td_1482_25
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    File URL: https://www.bancaditalia.it/pubblicazioni/temi-discussione/2025/2025-1482/en_tema_1482.pdf
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    More about this item

    Keywords

    patents; technology shock; green transition; business cycle;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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