Climate Shocks, Cyclones, and Economic Growth: Bridging the Micro-Macro Gap
Presented by:
Laura Bakkensen
School of Government and Public Policy
University of Arizona
Wednesday, November 11, 2020
12:00 pm-1:30 pm
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Empirical analyses of climatic event impacts on growth, while critical for policy, have been slow to be incorporated into macroeconomic climate-economy models. This paper pro-poses a joint empirical-structural approach to bridge this gap for tropical cyclones. First, we review competing empirical approaches in a harmonized global data set and through a theory lens. Second, we estimate cyclone impacts on structural determinants of growth (productivity, depreciation, fatalities) to quantify a stochastic growth model for 40 vulnerable countries and project welfare effects of climate-driven cyclone risk changes. Third, we compute cyclone impacts on the social cost of carbon in the seminal DICE model.
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