Leveraging the Disagreement on Climate Change: Theory and Evidence

• 成果类型: Article
• 署名作者: Bakkensen, Laura; Phan, Toan; Wong, Tsz-Nga
• 署名单位: University of Oregon; Federal Reserve System - USA; Federal Reserve Bank - Richmond
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/737236
• 发表日期: 2025
• 页码: 3132-3166
• 关键词: search; RISK; Bailouts; default; prices; POLICY

摘要

We develop a credit search model with maturity choice where agents disagree on when a long-run disaster will damage collateral assets. It predicts that disaster-pessimistic agents are more likely to leverage risky asset purchases and prefer debt contracts with longer maturities. Intuitively, pessimists value the default option of debt contracts as implicit disaster insurance, whose coverage increases with maturity implicitly and costs less to optimistic lenders. Using high-resolution sea level rise projections and comprehensive propriety data on coastal real estate and mortgages, we find robust evidence of these predictions. The findings provide relevant policy implications on insurance mandates, securitization, disaster assistance, and financial stability.