Climate Change through the Lens of Macroeconomic Modeling

Jesus Fernandez-Villaverde, Kenneth Gillingham and Simon Scheidegger

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: There is a rapidly advancing literature on the macroeconomics of climate change. This review focuses on developments in the construction and solution of structural integrated assessment models (IAMs), highlighting the marriage of state-of-the-art natural science with general equilibrium theory. We discuss challenges in solving dynamic stochastic IAMs with sharp nonlinearities, multiple regions, and multiple sources of risk. Key innovations in deep learning and other machine learning approaches overcome many computational challenges and enhance the accuracy and relevance of policy findings. We conclude with an overview of recent applications of IAMs and key policy insights.

Keywords: Climate change; integrated assessment model; dynamic stochastic general equilibrium (search for similar items in EconPapers)
JEL-codes: C61 E27 Q5 Q51 Q54 Q58 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2024-09-09
New Economics Papers: this item is included in nep-dge, nep-ene and nep-env
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Climate Change through the Lens of Macroeconomic Modeling (2024)
Working Paper: Climate Change through the Lens of Macroeconomic Modeling (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:pen:papers:24-024

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