Climate Shocks, Cyclones, and Economic Growth: Bridging the Micro-Macro Gap

45 Pages Posted: 22 Aug 2018 Last revised: 9 Jul 2022

See all articles by Laura Bakkensen

Laura Bakkensen

University of Arizona - School of Government and Public Policy

Lint Barrage

University of Maryland

Date Written: August 2018

Abstract

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 proposes a joint empirical-structural approach to bridge this gap for tropical cyclones. First, we review competing empirical approaches in a harmonized global dataset 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.

Suggested Citation

Bakkensen, Laura and Barrage, Lint, Climate Shocks, Cyclones, and Economic Growth: Bridging the Micro-Macro Gap (August 2018). NBER Working Paper No. w24893, Available at SSRN: https://ssrn.com/abstract=3236695

Laura Bakkensen (Contact Author)

University of Arizona - School of Government and Public Policy ( email )

315 Social Science Building
Tucson, AZ 85721
United States

Lint Barrage

University of Maryland ( email )

College Park
College Park, MD 20742
United States

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