Uncertainty, Social Valuation, and Climate Change Policy

In this 38-minute lecture from the BFI Student Lunch Series, Lars Peter Hansen, David Rockefeller Distinguished Service Professor at the University of Chicago, explores the multifaceted role of uncertainty in climate change policy. Examine how decision theory, stochastic impulse response theory, and uncertain cash flow pricing contribute to social valuation frameworks. Discover novel quantitative methods for characterizing uncertainty's impact on policy decisions, and learn when uncertainty actually drives more proactive approaches to addressing climate change. The presentation demonstrates practical applications of economic theory to one of today's most pressing global challenges through the lens of the Macro Finance Research Program (MFR).