Expect Above Average Temperatures: Identifying the Economic Impacts of Climate Change

33 Pages Posted: 26 Jun 2017

See all articles by Derek Lemoine

Derek Lemoine

University of Arizona - Department of Economics

Date Written: June 2017

Abstract

A rapidly growing empirical literature seeks to estimate the costs of future climate change from time series variation in weather. I formally analyze the consequences of a change in climate for economic outcomes. I show that those consequences are driven by changes in the distribution of realized weather and by expectations channels that capture how anticipated changes in the distribution of weather affect current and past investments. Studies that rely on time series variation in weather omit the expectations channels. Quantifying the expectations channels requires estimating how forecasts affect outcome variables and simulating how climate change would alter forecasts.

Suggested Citation

Lemoine, Derek, Expect Above Average Temperatures: Identifying the Economic Impacts of Climate Change (June 2017). NBER Working Paper No. w23549. Available at SSRN: https://ssrn.com/abstract=2992443

Derek Lemoine (Contact Author)

University of Arizona - Department of Economics ( email )

McClelland Hall
Tucson, AZ 85721-0108
United States

HOME PAGE: http://www.dereklemoine.com/

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