, China and Eastern Asia are examined to explore the extent to which the model captures the real world. …

This paper analyzes the effects of a change in a small but time-varying “disaster risk” à la Gourio (2012) in a New … Keynesian model. In a real business cycle framework, the disaster risk has been successful in replicating observed moments of … intertemporal substitution (EIS). In particular, we show here that an increase in the probability of disaster causes a recession …

implies that final good consumption must fall by 6.5% relative to a world without intervention, which is more than three times … growth in a world with non-renewable resources. Using two definitions of sustainability, the new putty-clay model delivers …

world without taxes. By contrast, the standard Cobb-Douglas approach suggests that a 4.7-fold tax rate in 2055 is sufficient …