This note documents a DSGE model of Climate Change. I extend the NK with geophysical variables, such as greenhouse gas emissions, carbon cycle, radiative forcing, and climate change. In this model, specify five different policy regimes: no policy, cap, intensive, tax, mandate.

On Identification of Bayesian DSGE Models In recent years there has been increasing concern about the identification of parameters in dynamic stochastic general equilibrium (DSGE) models. Given the structure of DSGE models it may be difficult to determine whether a parameter is identified. For the researcher using Bayesian methods, a lack of identification may not be evident since the posterior...

In recent years there has been increasing concern about the identi…cation of parameters in dynamic stochastic general equilibrium (DSGE) models. Given the structure of DSGE models it may be di¢ cult to determine whether a parameter is identi…ed. For the researcher using Bayesian methods, a lack of identi…cation may not be evident since the posterior of a parameter of interest may di¤er from its...

This paper applies a new Bayesian framework laid out in Faust and Gupta (2009) for evaluating the suitability of dynamic stochastic general equilibrium (DSGE) models for the task of monetary policy analysis. The paper characterizes practical monetary policy analysis as determining how intended policy should be revised in light of the structural interpretation of incoming news. The news is defin...