We host different speakers at our Economic Theory & Policy Seminar. 

Upcoming topics and speakers will be posted below.

15. April 2024, 16:00 until 17:30

Theory & Policy Seminar / Timo Trimborn (Aarhus University) / Economic Growth and Climate Change: Converging towards a Continuum of Steady States

Seminar

Timo Trimborn will give a talk at our Economic Theory & Policy Seminar.

"Economic Growth and Climate Change: Converging towards a Continuum of Steady States"

Timo Trimborn, opens an external URL in a new window (Aarhus University) and Thomas Steger, opens an external URL in a new window (University of Leipzig)

To gain insights into the mechanisms that shape the interaction between economic growth and climate change, we analyze the simplified DICE through the lens of growth theory. It is shown analytically that this model exhibits a continuum of steady states. This novel insight is important for two reasons.
a) Initial conditions of stock variables, which are notoriously difficult to calibrate, matter for the ultimate steady state (temperature, damages). However, we also show that uncertainty about the stock of global capital is considerably less consequential than uncertainty about GHG in the atmosphere.
b) Shocks that occur along the transition, e.g. volcanic eruptions or a pandemic drop of CO2 emissions, exert permanent effects.  These properties have important implications for understanding the effect of delayed climate policy and the consequences of TFP growth for long-run temperature.
It is shown how a postponement of climate policy implementation leads to a higher long-run temperature and why stronger future TFP growth may in fact be a good thing for the climate. We also investigate analytically the stability properties of the steady states by calculating the eigenvalues.

Calendar entry

Event location

TU Wien
1040 Vienna
DA green 04, Wiedner Haupstr. 8-10, Freihaus Buidling, green area, 4th floor (Seminarroom DA04 green)

 

Organiser

ECON
Julia Hutter
julia.hutter@tuwien.ac.at

 

Public

Yes

 

Entrance fee

No

 

Registration required

No

Theory & Policy Seminar / Timo Trimborn (Aarhus University) / Economic Growth and Climate Change: Converging towards a Continuum of Steady States

Timo Trimborn will give a talk at our Economic Theory & Policy Seminar.

"Economic Growth and Climate Change: Converging towards a Continuum of Steady States"

Timo Trimborn, opens an external URL in a new window (Aarhus University) and Thomas Steger, opens an external URL in a new window (University of Leipzig)

To gain insights into the mechanisms that shape the interaction between economic growth and climate change, we analyze the simplified DICE through the lens of growth theory. It is shown analytically that this model exhibits a continuum of steady states. This novel insight is important for two reasons.
a) Initial conditions of stock variables, which are notoriously difficult to calibrate, matter for the ultimate steady state (temperature, damages). However, we also show that uncertainty about the stock of global capital is considerably less consequential than uncertainty about GHG in the atmosphere.
b) Shocks that occur along the transition, e.g. volcanic eruptions or a pandemic drop of CO2 emissions, exert permanent effects.  These properties have important implications for understanding the effect of delayed climate policy and the consequences of TFP growth for long-run temperature.
It is shown how a postponement of climate policy implementation leads to a higher long-run temperature and why stronger future TFP growth may in fact be a good thing for the climate. We also investigate analytically the stability properties of the steady states by calculating the eigenvalues.