Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/297033 
Year of Publication: 
2024
Series/Report no.: 
Danmarks Nationalbank Working Papers No. 197
Publisher: 
Danmarks Nationalbank, Copenhagen
Abstract: 
News - anticipated changes of an economy's fundamentals - drive the business cycle. Climate change is big news: it will impact the economy profoundly, but its full effect will take time to materialize. To better understand the transmission of news, this paper focuses on climate-change expectations. First, we measure the expected economic impact of climate change in a representative survey of U.S. consumers. We find, in particular, that costly natural disasters are salient of climate change. Second, we calibrate a New Keynesian model with rare disasters to the survey results and find that shifts in climate-change expectations operate like adverse demand shocks.
Subjects: 
Climate change
Disasters
Expectations
Survey
Monetary policy
Business Cycle
Natural rate of interest
JEL: 
E43
E52
E58
Document Type: 
Working Paper

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