Francesco Busato, Bruno Chiarini, Gianluigi Cisco, Maria Ferrara
Global warming represents a "hot" topic in our current daily life. This paper builds up and simulates a dynamic stochastic general equilibrium (DSGE) model in the spirit of Nordhaus (2008) while investigating consumers' behavior in a context where economic and environmental issues interact. The paper suggests that households do not care about global warming as much as they should. Even if households make pro-environmental consumption choices, their investment decisions focus on the economic aspect mainly. Therefore, households' propensity to consume clean products is not sufficient to produce benefits to the environment.
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