Scholarlink

Background <p>This paper investigates the macroeconomic and cross-border spillover effects of the European green transition on the Euro area (EA) and a representative small open economy (SOE).</p> Methods <p>A two-region New Keynesian model (EA–SOE model) is developed to quantify the roles of energy price and exchange rate channels in transmitting the transition shock.</p> Results <p>The results show that the cross-border energy price channel dominates the exchange rate channel in shaping SOE macroeconomic responses, while monetary policy in both economies acts as a key mediator. The pace and intensity of the transition critically affect these responses, with more ambitious transitions generating stronger and more persistent effects.</p> Conclusions <p>The transition produces measurable welfare losses, with the EA consistently bearing a larger share of the burden (approximately 3.5 times that of the SOE), while the SOE is particularly vulnerable to inflationary pressures.</p>

错误：搜索内容不能为空，请输入英文关键词
错误：关键词超出字数限制，请精简
高级检索

European green transition: spillovers to the small open economy and welfare implications

  • 期刊论文

  • 出版模式：

    开放获取

  • 发表日期：

    2026年6月20日

查看全文
  • Langfeng Zhou

摘要

Background

This paper investigates the macroeconomic and cross-border spillover effects of the European green transition on the Euro area (EA) and a representative small open economy (SOE).

Methods

A two-region New Keynesian model (EA–SOE model) is developed to quantify the roles of energy price and exchange rate channels in transmitting the transition shock.

Results

The results show that the cross-border energy price channel dominates the exchange rate channel in shaping SOE macroeconomic responses, while monetary policy in both economies acts as a key mediator. The pace and intensity of the transition critically affect these responses, with more ambitious transitions generating stronger and more persistent effects.

Conclusions

The transition produces measurable welfare losses, with the EA consistently bearing a larger share of the burden (approximately 3.5 times that of the SOE), while the SOE is particularly vulnerable to inflationary pressures.