Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/284311 
Year of Publication: 
2023
Series/Report no.: 
Working Paper No. 961
Publisher: 
Queen Mary University of London, School of Economics and Finance, London
Abstract: 
Using a dynamic factor model with stochastic volatility, we examine the synchronization of temperature and precipitation changes across countries and regions. By doing so, we analyze the implications for the medium-term economic outlook and vulnerability to climate risks. Our findings reveal that a common factor explains a significant portion of temperature variance globally, with the largest contribution observed in sub-Saharan Africa, Latin America, and Asia. Additionally, the common factor accounts for the increase in temperature levels across these regions. In contrast, precipitation fluctuations exhibit more localized patterns. We find that countries with higher GDP per-capita tend to have lower exposure to global temperature changes.
Subjects: 
Climate change
Temperatures
Economic vulnerability
Dynamic factor model
Document Type: 
Working Paper

Files in This Item:
File
Size
1.22 MB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.