Measuring Impact of Uncertainty in a Stylized Macro-Economic Climate Model within a Dynamic Game Perspective

Research output: Working paperDiscussion paperOther research output

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.
LanguageEnglish
Place of PublicationTilburg
PublisherCentER, Center for Economic Research
Number of pages34
Volume2018-007
StatePublished - 12 Feb 2018

Publication series

NameCentER Discussion Paper
Volume2018-007

Fingerprint

Climate
Uncertainty
Macroeconomics
Dynamic games
Influence factors
Country studies
Green energy
Growth model
Economic growth

Keywords

  • Differential games
  • environemental engineering
  • uncertain dynamic systems
  • linearization
  • economic systems
  • open-loop control systems

Cite this

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). Tilburg: CentER, Center for Economic Research.
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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.

Measuring Impact of Uncertainty in a Stylized Macro-Economic Climate Model within a Dynamic Game Perspective. / Stienen, Valentijn; Engwerda, Jacob.

Tilburg : CentER, Center for Economic Research, 2018. (CentER Discussion Paper; Vol. 2018-007).

Research output: Working paperDiscussion paperOther research output

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AU - Engwerda,Jacob

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N2 - 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 thelinearized 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.

AB - 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 thelinearized 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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KW - economic systems

KW - open-loop control systems

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Stienen V, Engwerda J. Measuring Impact of Uncertainty in a Stylized Macro-Economic Climate Model within a Dynamic Game Perspective. Tilburg: CentER, Center for Economic Research. 2018 Feb 12, (CentER Discussion Paper).