Dynamic Stochastic Modeling of the Economy and Climate

• Departmental Seminar

Date and Location

Monday, February 3, 2020, 4:10 PM - 5:30 PM
ARE Library Conference Room, 4101 Social Sciences and Humanities

Abstract

Uncertainty about future economic and climate conditions substantially
affects the choice of policies for managing interactions between
the climate and the economy.We develop a framework of dynamic stochastic
integration of climate and economy, and show that the social
cost of carbon is substantially affected by both economic and climate
risks and is a stochastic process with significant variation. We examine
a wide but plausible range of values for critical parameters with robust
results and show that large-scale computing makes it possible to analyze
policies in models substantially more complex and realistic than
usually used in the literature.