Fat-tailed uncertainty and the learning-effect

In Chang Hwang

MPRA Paper from University Library of Munich, Germany

Abstract: One of the recent findings in the economics of climate change is that emissions control plays a significant role in the reduction of the tail-effect of fat-tailed uncertainty on welfare. The current paper gives another perspective: the learning-effect. The effect of emissions control on welfare is decomposed into the direct effect and the learning-effect. Although this has been known for thin-tailed uncertainty in the literature, this paper takes a different approach: the changes in temperature distributions under fat-tailed uncertainty and learning.

Keywords: Climate policy; deep uncertainty; Dismal Theorem; tail-effect; learning-effect (search for similar items in EconPapers)
JEL-codes: Q54 (search for similar items in EconPapers)
Date: 2014-02-14
New Economics Papers: this item is included in nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:53671

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