Dynamic coupling of the climate and macroeconomic systems

Citation:

Dumas, Patrice, Michael Ghil, Andreas Groth, and Stéphane Hallegatte. 2011. “Dynamic coupling of the climate and macroeconomic systems.” Math. & Sci. hum. / Mathematics and Social Sciences.
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Abstract:

This review paper presents a modeling framework for macroeco- nomic growth dynamics that is motivated by recent attempts to formulate and study “integrated models” of the coupling between natural and socio-economic phenomena. The challenge is to describe the interfaces between human acti- vities and the functioning of the earth system. We examine the way that this interface works in the presence of endogenous business cycle dynamics, based on a non-equilibrium dynamic model, and review the macroeconomic response to natural disasters. Our model exhibits a larger response to natural disasters during expansions than during recessions, and we raise questions about the as- sessment of climate change damages or natural disaster losses that are based purely on long-term growth models. In order to compare the theoretical fin- dings with observational data, we present a new method for extracting cyclic behavior from the latter, based on multivariate singular spectral analysis.

Last updated on 07/27/2016