Climate Change Uncertainty Spillover in the Macroeconomy

This repository contains codes and jupyter notebooks which compute and demonstrate results of "Climate Change Uncertainty Spillover in the Macroeconomy" by Micheal Barnett, William Brock and Lars Peter Hansen. Latest version could be found here.

Check out online demonstration:

We also have a jupyter book version:

Check out our binder:

Table of contents

• Prerequisite
• Acessing our project
• Quick user's guide

Prerequisite

Python == 3.8.x, package manager such as pip, and jupyter notebook to checkout the notebooks.

To go to the documentation of this project, please go to: (link avaliable when published).

This project has been tested in an environment with

Python == 3.8.11 and jupyter notebook == 5.7.10

Acessing our project

To store the notebook as well as codes in your local machine. You can do this by following steps below:

1. Open a Windows command prompt, Mac terminal or Linux terminal and change into the folder you would like to store the files.

   • You can do this using the command cd in the command prompt (on Windows) or terminal (on Mac and Linux).
     • For example, running cd 'C:\Users\username\python' (don’t forget '' around the path name to use an absolute path) would lead me to my designated folder.

   $ cd [folder path name]

2. Clone the github repository for the paper

   • If you don’t have github installed, try installing it from this page: https://git-scm.com/download.
   • You can do this by running below in the command prompt:

   $ git clone https://github.com/lphansen/ClimateUncertaintySpillover.git

3. Change directories into the ‘Wrestling’ folder and install the required packages for the current user or your initiated virtual environment:

   $ cd ClimateUncertaintySpillover
   $ pip install -r requirements.txt

4. Access the notebooks, run the following under the folder ClimateUncertaintySpillover/:

   $ jupyter notebook

   and you will see the notebooks listed below.

   Then click Run all from runtime to see our results.

Quick user's guide

description of notebooks' contents

The notebooks are separated according to section in the paper.

• Section 1: Introduction
• Section 2: Uncertain climate dynamics
• Section 3: Uncertain damage
• Section 4: Illustrative economy I: uncertain damages and smooth ambiguity
• Section 5: Illustrative economy II: uncertainty decomposition
• Section 6: Illustrative economy III: carbon abatement technology
• Section 7: Illustrative economy IV: tail-end damages
• Section 8: Conclusion

As well as appendices:

• Appendix A: Complete model
• Appendix B: Computational methods
• Appendix C: When Y has two states