Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/311168 
Year of Publication: 
2024
Series/Report no.: 
ECB Working Paper No. 3002
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
The projected increase in extreme climate events in the coming decades is likely to exacerbate the existing productivity and demographic challenges facing Europe. We study the dynamic, medium-run macroeconomic effects of heatwaves, droughts and floods in 1160 EU regions through the lens of a local projections, difference in difference framework. Summer heatwaves and droughts lower medium-term output, but the impact from floods depends on regional income levels. High-income regions witness reconstruction activity, less wealthy regions do not. We find evidence of population decline in affected regions as well as adaptation spending post-event, which lowers regional productivity.
Subjects: 
xtreme climate
weather
potential output
labour market
productivity
local projections
difference in difference
JEL: 
D24
E24
J22
R11
Q54
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-6896-6
Document Type: 
Working Paper

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