Best policy response to environmental shocks: Applying a stochastic framework
构建了一个分析经济增长中环境冲击的通用框架，研究内生资本投资如何同时作为冲击缓冲和污染源，并探讨了最优增长与高效环境政策。
The paper develops a general framework for the analysis of environmental shocks in growing economies. Endogenous capital investments allow identifying the dual role of capital as a buffer against shocks and a source of pollution. We study the effects of recurring natural disasters on optimal growth and efficient environmental policies. Emissions may cause continuous fluctuations, entail discrete and recurring jumps, or trigger so-called “tipping points” with large costs to the economy. Closed-form solutions are provided for all the model variants. We discuss possible applications in environmental economics and identify current research gaps.