Green Assets and Global Portfolio Tail Risk? A Stress-Testing exercise under multiple asset classes under distinct market phases.

Despite a burgeoning literature in the sphere of cryptocurrencies and green assets, yet, as of date, the literature fares poorly in terms of a holistic assessment of all asset classes, let alone stress testing such global portfolio risk under various market conditions. Our paper fulfills such a gap in the literature. Findings reveal that, irrespective of bearish or bullish market phases, green assets should be incorporated to mute down portfolio tail risk.

Should central banks manage climate change risk via a CO emissions augmented Taylor rule? Evidence using a DSGE approach.

The detrimental effects of climate change are becoming pressingly apparent over the decades with policy-makers clumsily grappling with various policies to mitigate on its impacts on their respective economies. However, inefficiencies permeate in the implementation of these policies as they are being implemented only at the end of the process of economic activities. To resolve such a problem, this paper develops an innovative and novel approach to internalize CO emissions by proposing a ramified Taylor rule which captures a climate change premium, the level of which is directly dependent on the extent of deviation of actual CO emissions from its targeted level.