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New article "Economic Growth, Income Distribution, and Climate Change" Lance Taylor, Armon Rezai and Duncan Foley (2018)

New article

"Eco­nomic Growth, In­come Dis­tri­bu­tion, and Cli­mate Change"

 pub­lished in Eco­lo­gical Eco­nom­ics Lance Taylor, Ar­mon Rezai and Duncan Fo­ley (2018) “Eco­nomic Growth, In­come Dis­tri­bu­tion, and Cli­mate Change”, Eco­lo­gical Eco­nom­ics, 146, 164-172.

Ab­stract: We present a model based on Keyne­sian ag­greg­ate de­mand and labor pro­ductiv­ity growth to study how cli­mate dam­age af­fects the long-run evolu­tion of the economy. Cli­mate change in­duced by green­house gas lowers prof­it­ab­il­ity, re­du­cing in­vest­ment and cut­ting out­put in the short and long runs. Short-run em­ploy­ment falls due to de­fi­cient de­mand. In the long run pro­ductiv­ity growth is slower, lower­ing po­ten­tial in­come levels. Cli­mate policy can in­crease in­comes and em­ploy­ment in the short and long runs while a con­tinu­ation of busi­ness-as-usual leads to a dysto­pian in­come dis­tri­bu­tion with af­flu­ence for few and high levels of un­em­ploy­ment for the rest.

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