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EVENTS

  • homepage  EVENTS

Seminar | Jiangmin Xu, Peking University



Time: May.29(Mon.), 13:30 - 15:00 (Beijing Time)


Title: Welfare Implications of Heatwaves


Venue: Zhonghui Building 106 


Abstract:


Regional heatwaves are associated with lower productivity and economic growth. Implications of these damage estimates for the usefulness of cooling adaptations in a future of global warming remain unclear. To address these implications, we develop a q-theory where heatwaves lead to downward jumps in productivity but firm adaptation spending mitigates exposure to these shocks.  Output growth depends on standard productivity and capital accumulation channels and an endogenous growth channel arising from adaptation. Based on our calibration to country-level adaptation, willingness-to-pay—the difference in welfare with and without adaptation—is small and damage from heatwaves large because their frequencies have been historically low.  More frequent heatwaves with global warming quickly increase willingness-to-pay and adaptation spending as a share of output, resulting in lower damage per heatwave.


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