Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/322167 
Year of Publication: 
2025
Series/Report no.: 
IES Working Paper No. 5/2025
Publisher: 
Charles University in Prague, Institute of Economic Studies (IES), Prague
Abstract: 
This study explores the heterogeneous and asymmetric macro-financial effects of climate change in CESEE countries, depending on the level of underlying macrofinancial vulnerabilities. Focusing solely on acute physical risks - those arising from extreme weather events - it employs panel quantile regression analysis to examine data from 2000Q1-2022Q4 for 17 countries in the region. Notably, we find that climate shocks exacerbate macroeconomic and financial imbalances, increasing the susceptibility of already vulnerable economies to additional risks. Specifically, countries with higher economic imbalances suffer more severe output disruptions and heightened inflationary pressures following a climate shock. While the impact of climate shocks on external imbalances may be less pronounced, countries with existing vulnerabilities may still encounter pressures on trade and competitiveness. Additionally, climate shocks can intensify financial vulnerabilities for countries already grappling with lower levels of financial resilience.
Subjects: 
extreme weather events
macro-financial vulnerabilities
CESEE countries
panel quantile regression analysis
JEL: 
E52
E51
E61
E63
E65
Document Type: 
Working Paper

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