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Weather Shocks and Output in Low-Income Countries: The Role of Policies and Adaptation
Author:
Mr. Sebastian Acevedo Mejia
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Claudio Baccianti null

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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 2019: Issue 178
Language:
English
Publication Date:
16 Aug 2019
DOI:
https://doi.org/10.5089/9781513509853.001
ISBN:
9781513509853
ISSN:
1018-5941
Pages:
34
Keywords:
WP; country; policy; low income; low-income country; Climate change; Climate policy; Adaptation to climate change; Weather shock; Policy buffer; climate adaptation Policy; adaptation policy; policy measure; policy buffer; suboptimal policy; open economy; macroeconomic policy; policy variable; Structural policies; Infrastructure; Greenhouse gas emissions; 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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We explore the extent to which macroeconomic policies, structural policies, and institutions can mitigate the negative relationship between temperature shocks and output in countries with warm climates. Empirical evidence and simulations of a dynamic general equilibrium model reveal that good policies can help countries cope with negative weather shocks to some extent. However, none of the adaptive policies we consider can fully eliminate the large aggregate output losses that countries with hot climates experience due to rising temperatures. Only curbing greenhouse gas emissions—which would mitigate further global warming—could limit the adverse macroeconomic consequences of weather shocks in a long-lasting way.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund