Arrangör: Institutionen för ekonomi
“Understanding Climate Damages: Consumption versus Investment ” (with Gregory Casey and Matthew Gibson )
We study the impact of climate change on the US economy, focusing on the relative productivity of the investment and consumption sectors. A long macroeconomic literature demonstrates that improvements in investment-specific productivity are a major driver of economic growth in the US and other developed economies. The investment sector is also highly vulnerable to climate change, in part due to the construction sub-sector. We develop a multi-sector model of structural change to study the effects of climate change on investment-productivity and the associated welfare implications. We find that accounting for investment-specific climate damages substantially increases the welfare cost of climate change.