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For all of their focus on asset prices, financial economists rarely ask if assets are priced ethically—that is, if their prices are compatible with the public good. Yet in a world facing major, possibly catastrophic problems—global warming, for instance, and growing inequality—it is now more important than ever that we allocate capital to projects that will benefit society as a whole, not just today but far into the future. In this book, Christian Gollier develops a powerful method for transforming our societal goals of collective prosperity into the cornerstone of our financial decision making. Ethical Asset Valuation and the Good Society starts by stating transparent moral principles...
Leading economists offer theoretical, quantitative, and policy perspectives on climate policy. Debates over post-Kyoto Protocol climate change policy often take note of two issues: the feasibility and desirability of international cooperation on climate change policies, given the failure of the United States to ratify Kyoto, and the very limited involvement of developing countries; and the optimal timing of climate policies. These essays by leading international economists in this book offer insights on both these concerns. The book first considers the appropriate institutions for effective international cooperation on climate change, proposing an alternative to the Kyoto arrangement and a t...
This volume focuses on recent developments in the use of structural econometric models in empirical economics. The first part looks at recent developments in the estimation of dynamic discrete choice models. The second part looks at recent advances in the area empirical matching models.
Our climate is changing. Less certain, however, is the timing and magnitude of climate change, and the cost of transition to a low-carbon world.This book identifies how climate change policy uncertainty may affect investment behaviour in the power sector. For power companies, where capital stock is intensive and long-lived, those risks rank among the biggest and can create an incentive to delay investment. Our analysis results show that the risk premiums of climate change uncertainty can add 40% of construction costs of the plant for power investors, and 10% of price surcharges for the electricity end-users. "Climate Policy Uncertainty and Investment Risk" tells what can be done in policy design to reduce these costs.