The Effects of Weather Shocks on Economic Activity: What are the Channels of Impact?

Download or read book The Effects of Weather Shocks on Economic Activity: What are the Channels of Impact? written by Mr.Sebastian Acevedo Mejia and published by International Monetary Fund. This book was released on 2018-06-22 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.