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Climate Change Skepticism in the Face of Catastrophe

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  • Mark Kagan

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    (VU University Amsterdam)

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    Abstract

    This paper develops a general-equilibrium model of skill-biased technological change that approximates the observed shifts in the shares of wage and non-wageincome going to the top decile of U.S. households since 1980. Under realisticassumptions, we find that all agents can benefi…t from the technology change,provided that the observed rise in redistributive transfers over this period istaken into account. We show that the increase in capital’s share of total incomeand the presence of capital-entrepreneurial skill complementarity are two keyfeatures that help support the wages of ordinary workers as the new technologydiffuses.

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    Bibliographic Info

    Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 12-112/VIII.

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    Date of creation: 25 Oct 2012
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    Handle: RePEc:dgr:uvatin:20120112

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    Web page: http://www.tinbergen.nl

    Related research

    Keywords: Income Inequality; Skill-biased Technological Change; Capital-skill Complementarity; Redistribution; Welfare;

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    1. Armon Rezai & Frederick van der Ploeg & Cees Withagen, 2012. "The Optimal Carbon Tax and Economic Growth: Additive versus Multiplicative Damages," CEEES Paper Series CE3S-05/12, European University at St. Petersburg, Department of Economics.
    2. Athanassoglou, Stergios & Xepapadeas, Anastasios, 2012. "Pollution control with uncertain stock dynamics: When, and how, to be precautious," Journal of Environmental Economics and Management, Elsevier, vol. 63(3), pages 304-320.
    3. Karp, Larry & Tsur, Yacov, 2008. "Time perspective and climate change policy," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt04k4b21g, Department of Agricultural & Resource Economics, UC Berkeley.
    4. Yacov Tsur & Amos Zemel, 2008. "Regulating environmental threats," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 39(3), pages 297-310, March.
    5. Pizer, William A., 1999. "The optimal choice of climate change policy in the presence of uncertainty," Resource and Energy Economics, Elsevier, vol. 21(3-4), pages 255-287, August.
    6. Leach, Andrew J., 2007. "The climate change learning curve," Journal of Economic Dynamics and Control, Elsevier, vol. 31(5), pages 1728-1752, May.
    7. William D. Nordhaus, 1992. "Rolling the 'Dice': An Optimal Transition Path for Controlling Greenhouse Gases," Cowles Foundation Discussion Papers 1019, Cowles Foundation for Research in Economics, Yale University.
    8. Kelly, David L. & Kolstad, Charles D., 1999. "Bayesian learning, growth, and pollution," Journal of Economic Dynamics and Control, Elsevier, vol. 23(4), pages 491-518, February.
    9. Tsur, Yacov & Zemel, Amos, 2009. "On the Dynamics of Competing Energy Sources," Discussion Papers 55265, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    10. Robert S. Pindyck, 2009. "Uncertain Outcomes and Climate Change Policy," Working Papers 0907, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
    11. Tsur, Yacov & Zemel, Amos, 2009. "On the Dynamics of Competing Energy Sources," Discussion Papers 93127, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    12. Michael Schauer, 1995. "Estimation of the greenhouse gas externality with uncertainty," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 5(1), pages 71-82, January.
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