Prospects of Tools from Differential Games in the Study of Macroeconomics of Climate Change

Abstract

In this note we sketch a dynamic framework within which the discussion on the macro economic effects of climate change take place. The problem setting is characterized by scientific uncertainties about the development of climate, potential large economic losses and human beings having their specific features. Some considerations about climate change, macroeconomics and their relationship are given. A characteristic feature of the problem setting is that there are multiple decision makers interacting in a dynamic world with large uncertainties. Problems of this type have been studied extensively by (dynamic) game theory. A rough literature review is provided and some items open for future research are indicated.

Inclusive Leadership and the Economics of Diversity

“…One of the most prominent forms to create revenues for public long-term investment causes are taxes. Tax compliance has been studied in the context of competitive games (Engwerda 2014). On environmental concern, taxation can grant redistribution potential between countries in the macroeconomic predicaments around economic growth and climate change (Greiner 2014).…”

Economic Growth and Choice of Energy: A Simplistic Strategic Approach

“…Furthermore, the paper presents an overview for apparently conflicting statistical findings for this relationship found elsewhere together with additional references in which potential major reasons for these conflicts are discussed. 7 For more details on the LQDG, see Engwerda [18]. real time, whereas the use of a receding horizon approach requires specification of a timing horizon and scrap value.…”

“…Problems of this type have been studied extensively by (dynamic) game theory. Engwerda [18] provides a rough literature review together with some issues left for future research in this area. Two review papers that give a good impression of what has been achieved the last few decades in modeling environmental and optimal resource extraction problems within a (macro) economic setting using game theoretic tools are by Jørgensen et al [26] and Long [28].…”