New publication! Adjusting to Rain Before It Falls shows that factor adjustment costs combined with projected increases in rainfall volatility will routinely lead to climate change damage. This effect is missing from all prior equilibrium-based analyses of climate impacts. Lots more in the paper: construction sector is especially vulnerable to these effects, current seasonal rainfall forecasts help construction firms but at the expense of workers, construction firms lose 10% of profit from unanticipatable rainfall shocks.
Written on 2023-02-10