Physics Colloquium

3:30–4:30 pm Maria Goeppert-Mayer Lecture Hall

Kersten Physics Teaching Center
Room 106
5720 S. Ellis Avenue

Climate Change: Uncertainty and Economic Policy
Lars Peter Hansen, University of Chicago
Host: Young-Kee Kim

Geophysicists examine and document the repercussions for the earth’s climate induced by alternative emission scenarios and model specifications. Using simplified approximations, they produce tractable characterizations of the associated uncertainty. Meanwhile, economists write simplified damage functions to assess uncertain feedbacks from climate change back to the economic opportunities for the macroeconomy. How can we assess both climate and emissions impacts, as well as uncertainty in the broadest sense, in social decision-making?

In this lecture, Lars Peter Hansen will provide a framework for answering this question by embracing recent decision theory and tools from asset pricing, and applying this structure with its interacting components in a revealing quantitative illustration. In 2013, Hansen was a recipient of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for his work advancing understanding of asset prices through empirical analysis. He is the director of the Macro Finance Research Program (MFR) and the David Rockefeller Distinguished Professor at the University of Chicago.

For more on “Pricing Uncertainty Induced by Climate Change,” read a reflection from Lars Peter Hansen, watch a conversation with co-author Michael Barnett or read the full paper.

Event Type

Colloquia and Lectures

Nov 7