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Many of you are well aware of the Keynesian push for boosting aggregate demand when an economy is slumping. Indeed, we rarely are told when the economy is doing well enough to not need a shot in the arm. That suits many of our political biases.

So, I ask this question in all seriousness. Don’t many folks wish to see more infrastructure spending and other forms of public investment? Then in that world, how come the coming economic damages that are going to happen because of climate change are actually a cause of worry? In fact, how come the coming environmental challenges are not wide-eyed anticipated? You might answer that, “these environmental challenges will first reduce consumption before we respond to the damages” but is that not the same as when stimulus opponents argue, “sure, stimulate all you want, those funds had to come from somewhere else first?”

So, do we have a good theory for why people are worried about future climate change, especially if they are on the more interventionist side of things when it comes to political economic preferences?

One Response to “On Politico-Macro Theorizing and Climate Change”

  1. Alex says:

    I must be misunderstanding, because I think some people worry that we won’t have the resources for public investment under future climate change. Also, they probably see stimulus as breaking windows, but climate change as breaking the whole house. If the state of the world is complete misery, not just slightly reduced consumption, even significant net benefits of public investment would not be worth it. Will try to confirm these guesses.

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