2000 character limit reached
Saving for sunny days: The impact of climate (change) on consumer prices in the euro area (2401.03740v1)
Published 8 Jan 2024 in econ.GN, q-fin.EC, and stat.AP
Abstract: Climate (change) affects the prices of goods and services in different countries or regions differently. Simply relying on aggregate measures or summary statistics, such as the impact of average country temperature changes on HICP headline inflation, conceals a large heterogeneity across (sub-)sectors of the economy. Additionally, the impact of a weather anomaly on consumer prices depends not only on its sign and magnitude, but also on its location and the size of the area affected by the shock. This is especially true for larger countries or regions with diverse climate zones, since the geographical distribution of climatic effects plays a role in shaping economic outcomes. Using time series data of geolocations, we demonstrate that relying solely on country averages fails to adequately capture and explain the influence of weather on consumer prices in the euro area. We conclude that the information content hidden in rich and complex surface data can provide valuable insights into the role of weather and climate variables for price stability, and more generally may help to inform economic policy.
- Modelling the effects of climate change on economic growth: a bayesian structural global vector autoregressive approach. Working Paper 46, FEEM.
- Using Weather Data and Climate Model Output in Economic Analyses of Climate Change. NBER Working Papers 19087, National Bureau of Economic Research, Inc.
- Climate change: Macroeconomic impact and implications for monetary policy. In: Walker, T., Gramlich, D., Bitar, M. and Fardnia, P. (eds.), Ecological, Societal, and Technological Risks and the Financial Sector, New York et al.: Springer International Publishing. 17.
- High-dimensional canonical correlation analysis. arXiv. Submitted on 28 Jun 2023 (v1), last revised 20 Aug 2023 (this version, v2).
- Demand or supply? An empirical exploration of the effects of climate change on the macroeconomy. Working Paper Series 2608, European Central Bank.
- An ensemble version of the e-obs temperature and precipitation data sets. Journal of Geophysical Research: Atmospheres 123(17), 9391–9409.
- The Price of Hesitation: How the Climate Crisis Threatens Price Stability and What the ECB Must Do about It; Final Report on Behalf of Greenpeace Germany. Number pbk173 (127) in DIW Berlin: Politikberatung kompakt. DIW Berlin, German Institute for Economic Research.
- The adverse consequences of global harvest and weather disruptions on economic activity. Nature Climate Change 11, 665–672.
- The impact of food prices on conflict revisited. Journal of Business & Economic Statistics 39(2), 547–560.
- Temperature shocks and economic growth: Evidence from the last half century†. American Economic Journal: Macroeconomics 4(3), 66–95.
- The economic impacts of climate change: Evidence from agricultural output and random fluctuations in weather. The American Economic Review 97(1), 354–385.
- Canonical correlation for stochastic processes. Stochastic Processes and their Applications 118(9), 1634–1661.
- Feeling the heat: extreme temperatures and price stability. Working Paper Series 2626, European Central Bank.
- Naturally negative: The growth effects of natural disasters. Journal of Development Economics 111(C), 92–106.
- The economic impact of weather anomalies. World Development 151, 105745.
- Functional canonical analysis for square integrable stochastic processes. Journal of Multivariate Analysis 85(1), 54–77.
- Hotelling, H. (1936). Relations between two sets of variates. Biometrika 28(3/4), 321–377.
- Canonical correlation analysis. In Applied Multivariate Statistical Analysis, pp. 321–330. Springer. CiteSeerX 10.1.1.324.403.
- Applied multivariate statistical analysis (5. ed ed.). Upper Saddle River, NJ: Prentice Hall.
- The impact of global warming on inflation: averages, seasonality and extremes. Working Paper Series 2821, European Central Bank.
- The effect of rainfall changes on economic production. Nature 601(7892), 223–227.
- Kousky, C. (2014). Informing climate adaptation: A review of the economic costs of natural disasters. Energy Economics 46(C), 576–592.
- An rkhs framework for functional data analysis. Journal of Statistical Planning and Inference 140(12), 3627–3637. Special Issue in Honor of Emanuel Parzen on the Occasion of his 80th Birthday and Retirement from the Department of Statistics, Texas A&M University.
- Canonical correlation analysis when the data are curves. Journal of the Royal Statistical Society. Series B (Methodological) 55(3), 725–740.
- Moessner, R. (2022). Effects of Precipitation on Food Consumer Price Inflation. CESifo Working Paper Series 9961, CESifo.
- Climate and monetary policy: do temperature shocks lead to inflationary pressures? Climatic Change 167(32), 1–21.
- Natoli, F. (2023). The macroeconomic effects of temperature surprise shocks. Temi di Discussione (Working Paper) 1407, Bank of Italy.
- Parker, M. (2018). The impact of disasters on inflation. Economics of Disasters and Climate Change 2, 21–48.
- Proctor, J. (2021). Atmospheric opacity has a nonlinear effect on global crop yields. Nature Food 2, 166–173.
- Simola, H. (2020). CO2 emissions embodied in EU-China trade and carbon border tax. BOFIT Policy Briefs 4/2020, Bank of Finland Institute for Emerging Economies (BOFIT).
- The impact of temperature anomalies on commodity futures. Energy Sources, Part B: Economics, Planning, and Policy 16(4), 357–370.
- The contribution of solar brightening to the US maize yield trend. Nature Climate Change 7(4), 275–278.
- Canonical correlation analysis in high dimensions with structured regularization. arXiv. Submitted on 3 Nov 2020 (v1), last revised 29 Jul 2021 (this version, v3).