Work in Progress

Firm Climate investments: Evidence from the UK

Draft coming soon!

Abstract

We analyse climate investment expectations using a large survey of UK firms. Firms expect climate-related investments to account for 5.4\% of their total capital expenditure over the next three years, an increase from 2.5\% over the past three years. Around two-thirds of these investments are expected to be in additional to normal capital expenditures, with some firms investing less elsewhere. Climate investments are expected mainly in switching to green energy sources and improving energy efficiency, and firms expect to finance these mainly using internal cash reserves. Climate investments will driven by larger firms as well as those in more energy-intensive sectors.

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Working papers

Oil Prices and Inflation Forecasts With Karl Whelan , Constantin Burgi.

Abstract

We examine how people's forecasts for oil prices influence their forecasts for broader inflation. Despite debate in the literature about whether consumers place too much weight on oil prices when making inflation predictions, we provide further confirmation for the results of Binder (2018), suggesting a low response to oil price forecasts, roughly consistent with the share of energy in the US CPI or somewhat below. In contrast, we show that the participants in the ECB's Survey of Professional Forecasters and the Wall Street Journal survey of economists place too little weight on oil prices when making their inflation forecasts.

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