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Eye of the storm : the impact of climate shocks on inflation and growth
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Autores
Orientador(es)
Resumo(s)
What is the impact of climate change on inflation and growth dynamics? This is not a simple question
to answer as climate shocks tend to be ubiquitous, but with opposing effects simultaneously on
demand and supply. The extent of which climate-related shocks affect inflation and economic growth
also depends on long-run scarring in the economy and the country’s fiscal and institutional capacity
to support recovery. In this paper, we use the local projection method to empirically investigate how
climate shocks, as measured by climate-induced natural disasters, influence inflation and economic
growth in a large panel of countries over the period 1970–2020. The results shows that both inflation
and real GDP growth respond significantly but also differently in terms of direction and magnitude
to different types of disasters caused by climate change. We split the full sample of countries into
income groups—advanced economies and developing countries—and find a striking contrast in the
impact of climate shocks on inflation and growth according to income level, state of the economy,
and fiscal space when the shock hits.
Descrição
Palavras-chave
Climate change natural disasters inflation growth local projections panel data
Contexto Educativo
Citação
Cevik, Serhan e João Tovar Jalles (2023). "Eye of the storm : the impact of climate shocks on inflation and growth". REM Working paper series, nº 0276/2023
Editora
ISEG - REM - Research in Economics and Mathematics