Numerical analysis of non-constant pure rate of time preference: A model of climate policy
When current decisions affect welfare in the far-distant future, as with climate change, the use of a declining pure rate of time preference (PRTP) provides potentially important modeling flexibility. The difficulty of analyzing models with non-constant PRTP limits their application. We describe and...
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sg-smu-ink.soe_research-31432018-05-14T09:20:22Z Numerical analysis of non-constant pure rate of time preference: A model of climate policy FUJII, Tomoki KARP, Larry When current decisions affect welfare in the far-distant future, as with climate change, the use of a declining pure rate of time preference (PRTP) provides potentially important modeling flexibility. The difficulty of analyzing models with non-constant PRTP limits their application. We describe and provide software (available online) to implement an algorithm to numerically obtain a Markov perfect equilibrium for an optimal control problem with non-constant PRTP. We apply this software to a simplified version of the numerical climate change model used in the Stern Review. For our calibration, the policy recommendations are less sensitive to the PRTP than widely believed. (C) 2008 Elsevier Inc. All rights reserved. 2008-07-01T07:00:00Z text application/pdf https://ink.library.smu.edu.sg/soe_research/2143 info:doi/10.1016/j.jeem.2007.11.004 https://ink.library.smu.edu.sg/context/soe_research/article/3143/viewcontent/JEEM_numerical_climate_2008.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection School Of Economics eng Institutional Knowledge at Singapore Management University non-constant pure rate of time preference hyperbolic discounting numerical methods non-renewable resources observational equivalence climate change Stern Review Environmental Sciences Environmental Studies Public Economics |
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non-constant pure rate of time preference hyperbolic discounting numerical methods non-renewable resources observational equivalence climate change Stern Review Environmental Sciences Environmental Studies Public Economics FUJII, Tomoki KARP, Larry Numerical analysis of non-constant pure rate of time preference: A model of climate policy |
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When current decisions affect welfare in the far-distant future, as with climate change, the use of a declining pure rate of time preference (PRTP) provides potentially important modeling flexibility. The difficulty of analyzing models with non-constant PRTP limits their application. We describe and provide software (available online) to implement an algorithm to numerically obtain a Markov perfect equilibrium for an optimal control problem with non-constant PRTP. We apply this software to a simplified version of the numerical climate change model used in the Stern Review. For our calibration, the policy recommendations are less sensitive to the PRTP than widely believed. (C) 2008 Elsevier Inc. All rights reserved. |
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text |
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FUJII, Tomoki KARP, Larry |
author_facet |
FUJII, Tomoki KARP, Larry |
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FUJII, Tomoki |
title |
Numerical analysis of non-constant pure rate of time preference: A model of climate policy |
title_short |
Numerical analysis of non-constant pure rate of time preference: A model of climate policy |
title_full |
Numerical analysis of non-constant pure rate of time preference: A model of climate policy |
title_fullStr |
Numerical analysis of non-constant pure rate of time preference: A model of climate policy |
title_full_unstemmed |
Numerical analysis of non-constant pure rate of time preference: A model of climate policy |
title_sort |
numerical analysis of non-constant pure rate of time preference: a model of climate policy |
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Institutional Knowledge at Singapore Management University |
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2008 |
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https://ink.library.smu.edu.sg/soe_research/2143 https://ink.library.smu.edu.sg/context/soe_research/article/3143/viewcontent/JEEM_numerical_climate_2008.pdf |
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