Showing 1 - 10 of 574
We present a modification of the most commonly used integrated assessment model (IAM) of climate change (DICE-2016), AD-DICE2016, which is designed to address three key aspects of climateeconomy models: treatment of uncertainty, the use of more appropriate utility functions, and including...
Persistent link: https://www.econbiz.de/10012510301
Anthropogenic greenhouse gas emissions are changing the energy balance of our planet. Various climatic feedbacks make the resulting warming over the next decades and centuries highly uncertain. We quantify how this uncertainty changes the optimal carbon tax in a stochastic dynamic programming...
Persistent link: https://www.econbiz.de/10012597858
Climate change is a phenomenon beset with major uncertainties and researchers should include them in Integrated Assessment Models. However, including further dimensions in IAM models comes at a cost. In particular, it makes most of these models suffer from the curse of dimensionality. In this...
Persistent link: https://www.econbiz.de/10011451547
The paper derives the optimal carbon tax in closed-form from an integrated assessment of climate change. The formula shows how carbon, temperature, and economic dynamics quantify the optimal mitigation effort. The model's descriptive power is comparable to numeric models used in policy advising....
Persistent link: https://www.econbiz.de/10011305430
In non-financial defined contribution (NDC) pension systems the contribution rate is kept at a constant level. A key element is the balance mechanism which is automatically applied if the finances appear insufficient. The balance mechanism is based on the ratio of assets to liabilities. When the...
Persistent link: https://www.econbiz.de/10010285162
This paper presents the Economic Security Index (ESI), a new, more comprehensive measure of economic insecurity. By combining data from multiple surveys, we create an integrated measure of volatility in available household resources, accounting for fluctuations in income and out-of-pocket...
Persistent link: https://www.econbiz.de/10010289981
Government-issued longevity bonds would allow longevity risk to be shared efficiently and fairly between generations. In exchange for paying a longevity risk premium, the current generation of retirees can look to future generations to hedge their systematic longevity risk. Longevity bonds will...
Persistent link: https://www.econbiz.de/10012832830
Life expectancy differs from person to person, population to population and pension scheme to pension scheme. So, your scheme members' mortality experience will be unique. Age is its dominant determinant, but life expectancy is influenced by other factors including gender, geographical location,...
Persistent link: https://www.econbiz.de/10012833086
We show that time-varying risk premium in financial markets can explain a key yet puzzling feature of labor markets: the large differences in unemployment risk across worker age-groups over the business cycle. Our search model features a time-varying risk premium and learning about unobserved...
Persistent link: https://www.econbiz.de/10012899920
Time-preference shocks affect agents' preferences for assets with different durations. We consider longevity risk as a source of time-preference shocks and model it in the recursive preferences setting. This implies a consumption-based three-factor model, including longevity risk, consumption...
Persistent link: https://www.econbiz.de/10012900587