Shocks to Transition Risk
We propose and implement a method to identify shocks to #transitionrisk addressing key challenges regarding its definition and #measurement. Our shocks are instances where significant new information about the economic relevance of climate change increases the valuation of #greenfirms over #brownfirms. To illustrate our method, we identify shocks to transition risk in the #us. These shocks have important aggregate effects, also inducing #financialinstability. They are associated with events that increase the likelihood of an orderly transition, and they specifically affect parts of the economy related to #fossilfuels and #energy. We show that these main results carry over to #de and the #uk. Still, we find an important role for country specificities.