We specify a stochastic economy-climate model, adapting Nordhaus' deterministic economy-climate model by allowing for Weitzman-type stochasticity. We show that, under expected power utility, the model is fragile to heavy-tailed distributional assumptions and we derive necessary and sufficient...

In searching for an appropriate utility function in the expected utility framework, we formulate four properties that we want the utility function to satisfy. We conduct a search for such a function, and we identify Pareto utility as a function satisfying all four desired properties. Pareto...

An expected utility based cost-benefit analysis is in general fragile to its distributional assumptions. We derive necessary and sufficient conditions on the utility function of the expected utility model to avoid this. The conditions ensure that expected (marginal) utility remains finite also...

Many regression models have two dimensions, say time (<italic>t</italic> = 1,…,<italic>T</italic>) and households (<italic>i</italic> = 1,…,<italic>N</italic>), as in panel data, error components, or spatial econometrics. In estimating such models we need to specify the structure of the error variance matrix <italic>Ω</italic>, which is of dimension <italic>T N</italic> × <italic>T N</italic>. If <italic>T N</italic> is...

This paper studies the interplay between climate, health, and the economy in a stylized world with eleven heterogeneous regions, with special emphasis on USA, Europe, China, India, and Africa. We introduce health impacts into a simple economic integrated assessment model where both the local...

This paper develops a dynamic model consisting of two regions (North and South), in which the accumulation of human capital is negatively influenced by the global stock of pollution. By characterizing the equilibrium strategy of each region, we show that the regions' best responses can be...

This paper studies the interplay between climate, health, and the economy in a stylized world with four heterogeneous regions, labeled 'West' (cold and rich), 'China' (cold and poor), 'India' (warm and poor), and 'Africa' (warm and very poor). We introduce health impacts into a simple integrated...

This paper develops a dynamic model consisting of two regions (North and South), in which the accumulation of human capital is negatively influenced by the global stock of pollution. By characterizing the equilibrium strategy of each region, we show that the regions’ best responses can be...