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• W2412319511 abstract "Carbon dioxide emissions are highly correlated with cyclical fluctuations in the U.S.economy; they increase during booms and fall during busts. We examine this relationshipfocusing on the sources of business cycles identified using structural vectorautoregression methodologies. Using data for 1973–2012, we find that emissions fallafter unanticipated technology and investment shocks, as well as anticipated technologyshocks. Emissions, however, increase after an anticipated investment shock. Ourfindings have two implications for the emerging literature that examines the optimalityof environmental policy using dynamic stochastic general equilibrium models withunanticipated technology shocks. First, the assumption that unanticipated technologyshocks cause carbon emissions to move with the business cycle has little support inthe data both at the aggregate and the state-level. Second, identifying the shocks thatexplain procyclical carbon emissions is an important first step for crafting effectiveenvironmental policy over the business cycle—an anticipated investment shock is acandidate." @default.
• W2412319511 created "2016-06-24" @default.
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• W2412319511 date "2015-08-01" @default.
• W2412319511 modified "2023-09-27" @default.
• W2412319511 title "How do Carbon Emissions Respond to Business-Cycle Shocks?" @default.
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• W2412319511 hasPublicationYear "2015" @default.
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