Adaptation and the Cost of Rising Temperature for the U.S. Economy

Charles Fries () and Francois Gourio

No WP 2020-08, Working Paper Series from Federal Reserve Bank of Chicago

Abstract: How costly will rising temperature due to climate change be for the U.S. economy? Recent research has used the well-identified response of output to weather to estimate this cost. But agents may adapt to the new climate. We propose a methodology to infer adaptation technology from the heterogeneous responses of output to weather observed currently across the U.S. Our model estimates how much each region has adapted already, and can predict how much each will adapt further after climate change. The size and distribution of losses from climate change vary substantially once adaptation is taken into account.

Keywords: Economic conditions; Income; Climate change (search for similar items in EconPapers)
JEL-codes: P46 Q51 Q54 Q56 (search for similar items in EconPapers)
Pages: 19
Date: 2020-03-02
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Citations: View citations in EconPapers (2)

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Working Paper: Adaptation and the Cost of Rising Temperature for the U.S. economy (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedhwp:87687

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DOI: 10.21033/wp-2020-08

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