Question A:
Under current policies on climate change, the associated physical risks (such as those arising from total seasonal rainfall and sea level changes, and increased frequency, severity, and correlation of extreme weather events) will be at most a very small factor in monetary policy decisions over the next decade.
Responses
Responses weighted by each expert's confidence
Question B:
The physical risks associated with climate change under current policies are likely to threaten financial stability over the next decade.
Responses
Responses weighted by each expert's confidence
Question A Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
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 Daron Acemoglu |
MIT | Bio/Vote History | ||
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From every angle climate change risk is huge. Not a minor factor. Unclear how it will affect monetary policy, but unlikely not to impact it
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 Alberto Alesina |
Harvard | Bio/Vote History | ||
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 Joseph Altonji |
Yale | Bio/Vote History | ||
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 Alan Auerbach |
Berkeley | Bio/Vote History | ||
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 David Autor |
MIT | Bio/Vote History | ||
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 Katherine Baicker |
University of Chicago | Bio/Vote History | ||
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 Abhijit Banerjee |
MIT | Bio/Vote History | ||
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 Marianne Bertrand |
Chicago | Bio/Vote History | ||
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 Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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 Raj Chetty |
Harvard | Did Not Answer | Bio/Vote History | |
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 Judith Chevalier |
Yale | Did Not Answer | Bio/Vote History | |
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 David Cutler |
Harvard | Bio/Vote History | ||
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 Angus Deaton |
Princeton | Bio/Vote History | ||
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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Climate scientists are writing that the main impacts, although huge, occur after 10 years. Monetary policy works on a shorter time scale.
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 Aaron Edlin |
Berkeley | Bio/Vote History | ||
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Almost any claim saying "at most" is literally wrong. A lot can happen in a decade and has in the last decade. Time will tell, sadly.
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 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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May have large effects from (relatively rare) time to time.
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 Liran Einav |
Stanford | Bio/Vote History | ||
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 Ray Fair |
Yale | Bio/Vote History | ||
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 Amy Finkelstein |
MIT | Bio/Vote History | ||
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 Austan Goolsbee |
Chicago | Bio/Vote History | ||
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 Michael Greenstone |
University of Chicago | Did Not Answer | Bio/Vote History | |
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 Robert Hall |
Stanford | Bio/Vote History | ||
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True for US monetary policy. The main big outside event that might create such a serious problem for monetary policy is a flu epidemic
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 Oliver Hart |
Harvard | Bio/Vote History | ||
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 Bengt Holmström |
MIT | Bio/Vote History | ||
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 Caroline Hoxby |
Stanford | Bio/Vote History | ||
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Monetary policy tends to address issues that have a much shorter time-frame than climate change could possibly have.
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 Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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 Kenneth Judd |
Stanford | Bio/Vote History | ||
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Monetary policy is based on data that is aggregated over space and time. Weather events will have very small impact on that data.
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 Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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 Pete Klenow |
Stanford | Bio/Vote History | ||
 Jonathan Levin |
Stanford | Bio/Vote History | ||
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Ten years is a short time frame for climate change but not implausible that an extreme weather event would affect the macroeconomy.
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 Eric Maskin |
Harvard | Bio/Vote History | ||
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Eventually climate change will have a big effect on the economy, but it's hard to say whether that will happen within a decade
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 William Nordhaus |
Yale | Bio/Vote History | ||
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 Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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 Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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 Larry Samuelson |
Yale | Bio/Vote History | ||
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It seems unlikely, but possible that climate-related costs may become so large as to affect the aggregate economy and hence monetary policy.
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 José Scheinkman |
Columbia University | Bio/Vote History | ||
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Climate change and regulatory responses are likely to cause significant supply shocks but the effect on monetary policy is not obvious.
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 Richard Schmalensee |
MIT | Bio/Vote History | ||
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 Carl Shapiro |
Berkeley | Bio/Vote History | ||
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 Robert Shimer |
University of Chicago | Bio/Vote History | ||
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This is from the perspective of the US and Europe. Little aggregate risk is attributable to climate or weather.
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 James Stock |
Harvard | Bio/Vote History | ||
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 Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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 Christopher Udry |
Northwestern | Bio/Vote History | ||
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"will" != "should". Need lots of financial innovation esp in poor countries to signal likely changes and deal with increasing shocks.
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Question B Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
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Daron Acemoglu |
MIT | Bio/Vote History | ||
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Tail risks from climate can certainly impact US and global economic stability, and hence financial stability.
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Alberto Alesina |
Harvard | Bio/Vote History | ||
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Joseph Altonji |
Yale | Bio/Vote History | ||
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Not over the next decade, but within 2 or 3 decades.
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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David Autor |
MIT | Bio/Vote History | ||
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NOT in the U.S., but in poor, low-lying countries
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Katherine Baicker |
University of Chicago | Bio/Vote History | ||
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Abhijit Banerjee |
MIT | Bio/Vote History | ||
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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Raj Chetty |
Harvard | Did Not Answer | Bio/Vote History | |
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Judith Chevalier |
Yale | Did Not Answer | Bio/Vote History | |
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David Cutler |
Harvard | Bio/Vote History | ||
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Angus Deaton |
Princeton | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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The huge impacts are said to be farther out in time. They are unlikely to destabilize the financial system, specifically, within 10 years.
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Aaron Edlin |
Berkeley | Bio/Vote History | ||
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Immediate threats include big fires and extreme weather events. Threats to global financial stability are probably farther in the future.
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Liran Einav |
Stanford | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Amy Finkelstein |
MIT | Bio/Vote History | ||
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Austan Goolsbee |
Chicago | Bio/Vote History | ||
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Michael Greenstone |
University of Chicago | Did Not Answer | Bio/Vote History | |
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Robert Hall |
Stanford | Bio/Vote History | ||
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Dodd-Frank gave us the tools to achieve financial stability,so, if we use them, we are not at risk from climate change or other disturbances
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Oliver Hart |
Harvard | Bio/Vote History | ||
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Bengt Holmström |
MIT | Bio/Vote History | ||
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Caroline Hoxby |
Stanford | Bio/Vote History | ||
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I am confident being uncertain (and so should others be) about the answer to this question. Expressing certainty would be mere evangelism.
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Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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If financial stability is threatened by more bad weather, then we are in deep trouble when it comes to handling the explosion in debt.
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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The transition risks from policies that change the price of carbon are VERY different matter and those could create lots of stranded assets
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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Again, ten years seems short but it is conceivable that an extreme weather event would disrupt the macroeconomy and/or financial system
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Eric Maskin |
Harvard | Bio/Vote History | ||
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William Nordhaus |
Yale | Bio/Vote History | ||
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Physical risks likely to be small relative to other risks. Possible exception in insurance industry.
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Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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Larry Samuelson |
Yale | Bio/Vote History | ||
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A threat to financial stability seems unlikely, but certainly not impossible.
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José Scheinkman |
Columbia University | Bio/Vote History | ||
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Threat smaller if regulatory authorities force financial institutions to fully account for climate risk in their risk-management.
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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Possible, yes; likely, no.
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Carl Shapiro |
Berkeley | Bio/Vote History | ||
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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Potential risks emanate from property insurance
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James Stock |
Harvard | Bio/Vote History | ||
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Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Christopher Udry |
Northwestern | Bio/Vote History | ||
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