via WSJ:
The Federal Reserve’s credibility is in tatters. It predicted low inflation through 2021 even as the money supply exploded and higher inflation followed. To catch up, it quickly raised interest rates, stressing many banks, and Fed examiners failed to act before depositors noticed that Silicon Valley Bank was insolvent. The result was bank runs and panic. But instead of lowering inflation and preventing recession, many of the Fed’s 400 economists are busy fighting climate change.
Examples of climate activism abound. This year the Fed is forcing big banks to produce complex reports on their climate vulnerability in a “pilot project” that is sure to expand and might lead to lending restrictions. A query of the Fed’s listing of recent publications returns hundreds of research papers, press releases and policy statements related to climate change. The San Francisco Fed hosted a conference on climate change in May, in which 27 Fed economists participated.
With all this effort, one might hope the Fed would produce high-quality research on climate change. But I took a close look at two Fed studies on the subject and found shockingly poor analysis. These studies on the effect of temperature on U.S. and world economic growth are cited without a hint of skepticism and widely lavished with media attention. I’ve managed to debunk both.
In the September issue of Econ Journal Watch, I discredited a paper from the Richmond Fed claiming that warming reduces economic growth in the U.S. I showed that the paper had serious problems with its statistical reasoning and robustness. My analysis concluded that the data used in the paper showed no meaningful relationship between temperatures and growth.