Time: 12 Noon
Location: Wean Hall 3701 Conference Room
Speaker: Nick Muller
Topic: Implications of external costs for measures of output, growth, and policy analysis
Modern economic activity generates pollution. Most forms of pollution are not priced by markets because the impacts of such residuals are external to market activity. This means that the allocation of resources within an economic system is inefficient, and that measures of output and growth are not accurate. This analysis estimates the external costs from air pollution in the U.S. from 1999 to 2011. The talk focuses on the magnitude of the air pollution externality, as well as adjusted measures of output and growth that deduct pollution damage from conventional aggregate indicators such as Gross Domestic Product. The talk concludes by exploring the implications for discounting and intertemporal policy analysis.