TY  - UNPD
A1  - Donadelli, Michael
A1  - Grüning, Patrick
A1  - Jüppner, Marcus
A1  - Kizys, Renatas
T1  - Global temperature, R&D expenditure, and growth
T2  - SAFE working paper series ; No. 188
N2  - We shed new light on the macroeconomic effects of rising temperatures. In the data, a shock to global temperature dampens expenditures in research and development (R&D). We rationalize this empirical evidence within a stochastic endogenous growth model, featuring temperature risk and growth sustained through innovations. In line with the novel evidence in the data, temperature shocks undermine economic growth via a drop in R&D. Moreover, in our endogenous growth setting temperature risk generates non-negligible welfare costs (i.e., 11% of lifetime utility). An active government, which is committed to a zero fiscal deficit policy, can offset the welfare costs of global temperature risk by subsidizing the aggregate capital investment with one-fifth of total public spending.
T3  - SAFE working paper - 188 
KW  - Global Temperature
KW  - R&D
KW  - Welfare Costs
Y1  - 2017
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/45193
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-451934
UR  - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3075229
IS  - This version: November 15, 2017
PB  - SAFE
CY  - Frankfurt am Main
ER  -