Fat-tailed uncertainty and the learning-effect
AbstractOne of the recent findings in the economics of climate change is that emissions control plays a significant role in the reduction of the tail-effect of fat-tailed uncertainty on welfare. The current paper gives another perspective: the learning-effect. The effect of emissions control on welfare is decomposed into the direct effect and the learning-effect. Although this has been known for thin-tailed uncertainty in the literature, this paper takes a different approach: the changes in temperature distributions under fat-tailed uncertainty and learning.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 53671.
Date of creation: 14 Feb 2014
Date of revision:
Climate policy; deep uncertainty; Dismal Theorem; tail-effect; learning-effect;
Find related papers by JEL classification:
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
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