MARC Record from Library of Congress

LEADER: 02297nam a22002897a 4500
001 2011657476
003 DLC
005 20120112154746.0
007 cr |||||||||||
008 120112s2011 mau sb 000 0 eng
010 $a 2011657476
040 $aDLC$cDLC
050 00 $aHB1
100 1 $aBansal, Ravi.
245 10 $aWelfare costs of long-run temperature shifts$h[electronic resource] /$cRavi Bansal, Marcelo Ochoa.
260 $aCambridge, MA :$bNational Bureau of Economic Research,$cc2011.
490 1 $aNBER working paper series ;$vworking paper 17574
538 $aSystem requirements: Adobe Acrobat Reader.
538 $aMode of access: World Wide Web.
500 $aTitle from PDF file as viewed on 1/12/2012.
530 $aAlso available in print.
504 $aIncludes bibliographical references.
520 3 $a"This article makes a contribution towards understanding the impact of temperature fluctuations on the economy and financial markets. We present a long-run risks model with temperature related natural disasters. The model simultaneously matches observed temperature and consumption growth dynamics, and key features of financial markets data. We use this model to evaluate the role of temperature in determining asset prices, and to compute utility-based welfare costs as well as dollar costs of insuring against temperature fluctuations. We find that the temperature related utility-costs are about 0.78% of consumption, and the total dollar costs of completely insuring against temperature variation are 2.46% of world GDP. If we allow for temperature-triggered natural disasters to impact growth, insuring against temperature variation raise to 5.47% of world GDP. We show that the same features, long-run risks and recursive-preferences, that account for the risk-free rate and the equity premium puzzles also imply that temperature-related economic costs are important. Our model implies thata rise in global temperature lowers equity valuations and raises risk premiums"--National Bureau of Economic Research web site.
700 1 $aOchoa, Marcelo.
710 2 $aNational Bureau of Economic Research.
830 0 $aWorking paper series (National Bureau of Economic Research : Online) ;$vworking paper no. 17574.
856 40 $uhttp://www.nber.org/papers/w17574