Additive Damages, Fat-Tailed Climate Dynamics, and Uncertain Discounting
نویسندگان
چکیده
منابع مشابه
Additive Damages, Fat-Tailed Climate Dynamics, and Uncertain Discounting
This paper in applied theory argues that there is a loose chain of reasoning connecting the following three basic links in the economics of climate change: 1) additive disutility damages may be appropriate for analyzing some impacts of global warming; 2) an uncertain feedback-forcing coe¢ cient, which might be near one with in nitesimal probability, can cause the distribution of the future time...
متن کاملDiscounting with fat-tailed economic growth
When the growth of aggregate consumption exhibits no serial correlation, the socially efficient discount rate is independent of the time horizon, because the wealth effect and the precautionary effect are proportional to the time horizon. In this paper, we consider alternative growth processes: an AR(1), a Brownian motion with unknown trend or volatility, a two-state regimeswitching model, and ...
متن کاملDiscounting climate change damages: Working note for the Stern review
This working note provides a basic overview of discounting in the context of climate change policy. After defining the social discount factor and social discount rate in terms of shadow prices (section 2), and noting the limitations of cost-benefit analysis for climate change (section 3), the determination of efficient social discount rates is discussed given: the impact of uncertainty about fu...
متن کاملShifting the Fat-Tailed Distribution of Blockbuster Punitive Damages Awards
The distribution of blockbuster punitive damages awards has fat tails similar to the distributions of losses from natural disasters. Extremely large awards occur more often and are more difficult to predict than if blockbuster awards were distributed normally. The size and predictability of awards are important factors in the U.S. Supreme Court’s decisions on punitive damages. This article exam...
متن کاملDiscounting an uncertain future
The objective of this paper is to determine the socially optimal discount rate for public investment projects that entail costs and benefits in the very long run. We suppose that there is an exogenous process for the growth of consumption per capita, which is stochastic. We first evaluate the determinants of the discount rate for a specific horizon when the representative agent has a recursive ...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: Economics
سال: 2009
ISSN: 1864-6042
DOI: 10.5018/economics-ejournal.ja.2009-39