Yongyang Cai

Learn More
Most current cost-benefit analyses of climate change policies suggest an optimal global climate policy that is significantly less stringent than the level required to meet the internationally agreed 2 °C target. This is partly because the sum of estimated economic damage of climate change across various sectors, such as energy use and changes in(More)
This paper introduces a dynamic stochastic integrated model of climate and economy (DSICE), and a numerical dynamic programming algorithm for its solution. More specifically, we solve an example with annual time periods, a six hundred year horizon, and shocks to the economic and climate system. Our dynamic programming methods solve such models on a laptop(More)
The multi-stage decision-making problems are numerically challenging. When the problems are time-separable, dynamic programming (DP) is a popular method to solve them. In DP problems, if state variables and control variables are continuous such that value functions are also continuous, then we have to use some approximation for the value functions, since(More)
There is great uncertainty about future climate conditions and the appropriate policies for managing interactions between the climate and the economy. We develop a multidimensional computational model to examine how uncertainties and risks in the economic and climate systems affect the social cost of carbon (SCC)—that is, the present value of the marginal(More)
An algorithm for computing a Gröbner basis of an ideal of polynomials whose coefficients are taken from a ring with zero divisors, is presented; such rings include Zn and Zn[i], where n is not a prime number. The algorithm is patterned after (1) Buchberger’s algorithm for computing a Gröbner basis of a polynomial ideal whose coefficients are from a field(More)
This paper develops a numerical method for computing equilibria of dynamic games with state variables, and applies it to an oligopoly game with endogenous productive capacity. Our algorithm allows us to study the nature of cooperation and examine how the ability to collude is affected by state variables, such as current capacity. We study whether investment(More)
  • 1