Showing papers by "Kenneth L. Judd published in 2018"
TL;DR: In this article, a stochastic dynamic regional integrated assessment model (IAM) of the climate and economic system including a number of important climate science elements that are missing in most IAMs is presented.
Abstract: We build a novel stochastic dynamic regional integrated assessment model (IAM) of the climate and economic system including a number of important climate science elements that are missing in most IAMs. These elements are spatial heat transport from the Equator to the Poles, sea level rise, permafrost thaw and tipping points. We study optimal policies under cooperation and various degrees of competition between regions. Our results suggest that when the elements of climate science which are accounted for in this paper are ignored, important policy variables such as the social cost of carbon and adaptation could be seriously biased.
10 citations
TL;DR: In this article, the authors show that perturbation methods can be applied to a DSGE model with incomplete markets and a finite but arbitrarily large number of heterogeneous agents and demonstrate the impact of heterogeneity on macroeconomic quantities and the pricing of risk.
2 citations