Treating the cross-sectional distribution as an explicit state variable turns a heterogeneous-agent economy into a single, low-dimensional "Master Equation," and this paper shows that its first- and …
PublishedQuarterly Journal of EconomicsOnline 19 Feb 2026Published Apr 2026
The paper shows that the macroeconomic impact of climate change is an order of magnitude larger than what standard country-level panel estimates suggest. The key identification innovation is to …