Climate-Related Financial Stability Risks for the United States: Methods and Applications

RePEc Short ID: pbr67
ORCID iD: 0000-0001-8184-2610

Brunetti, Celso; Crosignani, Matteo; Dennis, Benjamin; Kotta, Gurubala; Morgan, Donald P.; Shin, Chaehee; Zer, Ilknur

doi:10.59576/epr.30.1.1-37

Journal Article

Climate-Related Financial Stability Risks for the United States: Methods and Applications

Abstract: The authors review ten broad classes of models that have been used to study potential financial stability risks arising from climate change in the United States. Their lens is primarily methodological: They describe each modeling technique, its advantages and disadvantages, and its key results. They find that statistical methods, based on reduced-form econometrics, are the most used tool, followed by general equilibrium models. While no approach in isolation addresses the complexity of climate-related financial stability risks, they discuss how existing techniques can be combined to inform policymakers and the private sector about climate-related financial stability risks for the United States.

JEL Classification: C10; D58; G10; G20; Q54;

https://doi.org/10.59576/epr.30.1.1-37