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Measuring Impact of Uncertainty in a Stylized Macro-Economic Climate Model within a Dynamic Game Perspective
Stienen,Valentijn Engwerda,Jacob
Stienen,Valentijn
Engwerda,Jacob
Abstract
In this paper we try to quantify/measure the main factors that influence the equilibrium outcome and pursued strategies in a simplistic model for the use of fossil versus green energy over time. The model is derived using the standard Solow macro-economic growth model in a two-country setting within a dynamic game perspective. After calibrating the model for a setting of OECD versus non-OECD countries we study what kind of uncertainties affect the outcomes of the linearized model most, assuming both countries use Nash strategies to cope with shocks that impact the model. The main outcome of this study is that the parameters that occur in the objective of both players seem to carry the most uncertainty for both the outcome of the model and strategies.
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Date
2018-02-12
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CentER, Center for Economic Research
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2018_007.pdf
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Keywords
Differential games, environemental engineering, uncertain dynamic systems, linearization, economic systems, open-loop control systems, Q43 - Energy and the Macroeconomy, Q54 - Climate ; Natural Disasters and Their Management ; Global Warming, Q56 - Environment and Development ; Environment and Trade ; Sustainability ; Environmental Accounts and Accounting ; Environmental Equity ; Population Growth, Q58 - Government Policy, C61 - Optimization Techniques ; Programming Models ; Dynamic Analysis, C72 - Noncooperative Games, C73 - Stochastic and Dynamic Games ; Evolutionary Games ; Repeated Games, SDG 7 - Affordable and Clean Energy, SDG 8 - Decent Work and Economic Growth
Citation
Stienen, V & Engwerda, J 2018 'Measuring Impact of Uncertainty in a Stylized Macro-Economic Climate Model within a Dynamic Game Perspective' CentER Discussion Paper, vol. 2018-007, CentER, Center for Economic Research, Tilburg.
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info:eu-repo/semantics/restrictedAccess