Department of Economics
D891 Loeb, 1125 Colonel By Drive
Ottawa, ON, K1S 5B6
Information about this author at RePEc
NBER Working Papers and Publications
|May 2016||Carbon Emissions and Business Cycles|
with Hashmat Khan, Christopher R. Knittel, Konstantinos Metaxoglou: w22294
U.S. carbon dioxide emissions are highly procyclical—they increase during expansions and fall during recessions. Given this empirical fact, we estimate the response of emissions to four prominent technology shocks from the business-cycle literature using structural vector autoregressive methodologies and data for 1973–2012. By studying the response of emissions to these shocks, we provide a novel approach to assess the shocks’ relevance as sources of aggregate output fluctuations. We find that emissions rise on impact only after an anticipated investment-specific technology shock; the response is statistically significant after the first quarter. The same shock explains most— roughly a third—of the total variation in emissions at a horizon of 5 years. Notably, emissions decrease on impact ...
Published: Hashmat Khan & Konstantinos Metaxoglou & Christopher R. Knittel & Maya Papineau, 2019. "Carbon emissions and business cycles," Journal of Macroeconomics, vol 60, pages 1-19.