In addition, an adequate carbon price remains a key political tool on the road to climate neutrality, with a clear steering effect. Of course it is important to keep an eye on the social balance. But for this, policymakers have other, more appropriate instruments. Policymakers in Europe are rushing to find alternatives to Russian gas, too.
When firms were forecasting that general prices or sales prices of their own products would decline, firms’ burden of paying interest rates remained large because, whatever low the nominal interest rates might become, the real interest rates would become higher than the nominal interest rates (Chart 5).