The Impact of Uncertainty Shocks under Measurement Error: A Proxy SVAR approach

A growing literature considers the impact of uncertainty using SVAR models that include proxies for uncertainty shocks as endogenous variables. In this paper we consider the impact of measurement error in these proxies on the estimated impulse responses. We show via a Monte-Carlo experiment that measurement error can result in attenuation bias in impulse responses. In contrast, the proxy SVAR that uses the uncertainty shock proxy as an instrument does not su¤er from this bias. Applying this latter method to the Bloom (2009) data-set results in impulse responses to uncertainty shocks that are larger in magnitude and more persistent than those obtained from a recursive SVAR.

Climate change adaptation planning under uncertainty in Ho Chi Minh City, Vietnam: a case study on institutional vulnerability, adaptive capacity and climate change governance

Climate change is expected to have wide-ranging impacts on urban areas and creates additional challenges for sustainable development. Urban areas are inextricably linked with climate change, as they are major contributors to it, while also being particularly vulnerable to its impacts. Climate change presents a new challenge to urban areas, not only because of the expected rises in temperature and sea-level, but also the current context of failure to fully address the institutional barriers preventing action to prepare for climate change, or feedbacks between urban systems and agents. Despite the importance of climate change, there are few cities in developing countries that are attempting to address these issues systematically as part of their governance and planning processes. While there is a growing literature on the risks and vulnerabilities related to climate change, as yet there is limited research on the development of institutional responses, the dissemination of relevant knowledge and evaluation of tools for practical planning responses by decision makers at the city level. This thesis questions the dominant assumptions about the capacity of institutions and potential of adaptive planning. It argues that achieving a balance between climate change impacts and local government decision-making capacity is a vital for successful adaptation to the impacts of climate change. Urban spatial planning and wider environmental planning not only play a major role in reducing/mitigating risks but also have a key role in adapting to uncertainty in over future risk. The research focuses on a single province - the biggest city in Vietnam - Ho Chi Minh City - as the principal case study to explore this argument, by examining the linkages between urban planning systems, the structures of governance, and climate change adaptation planning. In conclusion it proposes a specific framework to offer insights into some of the more practical considerations, and the approach emphasises the importance of vertical and horizontal coordination in governance and urban planning.