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The Effects of Weather Shocks on Economic Activity: What are the Channels of Impact?
Author:
Mr. Sebastian Acevedo Mejia
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Mr. Mico Mrkaic
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Natalija Novta
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Evgenia Pugacheva null

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Petia Topalova null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2018: Issue 144
Language:
English
Publication Date:
13 Jun 2018
DOI:
https://doi.org/10.5089/9781484363027.001
ISBN:
9781484363027
ISSN:
1018-5941
Pages:
40
Keywords:
WP; economic activity; dependent variable; Climate change; Environoment and growth; Climate policy; temperature increase; developing country; temperature shock; productivity effect; infant mortality; Public expenditure review; Emerging and frontier financial markets; Productivity; Global
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Global temperatures have increased at an unprecedented pace in the past 40 years. This paper finds that increases in temperature have uneven macroeconomic effects, with adverse consequences concentrated in countries with hot climates, such as most low-income countries. In these countries, a rise in temperature lowers per capita output, in both the short and medium term, through a wide array of channels: reduced agricultural output, suppressed productivity of workers exposed to heat, slower investment, and poorer health. In an unmitigated climate change scenario, and under very conservative assumptions, model simulations suggest the projected rise in temperature would imply a loss of around 9 percent of output for a representative low-income country by 2100.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund