Climate pattern effects on global economic conditions
Year: 2024
Type: article
Abstract: This study investigates how El Niño–Southern Oscillation (ENSO) climate patterns affect global economic conditions . Prior research suggests that ENSO phases, particularly El Niño , influence economic outcomes, but with limited consensus on their broader macroeconomic impacts. Using a novel monthly dataset from 20 economies, covering 80% of global output from 1999 to 2022, we employ a global augmented vector autoregression with local projections (GAVARLP) model. The empirical findings suggest that El Niño boosts output with minimal inflationary effects, reducing global economic policy uncertainty, while La Niña raises food inflation , which can amplify aggregate inflation as a “second-round” effect, amplifying uncertainty. These findings shed light on the transmission channels of climate shocks and highlight the significant role of ENSO in shaping global economic conditions, emphasizing why climate shocks should be a concern for policy markers.
Source: Economic Modelling
Authors: Gilles Dufrénot, William Ginn, Marc Pourroy
Institutions: Centre National de la Recherche Scientifique, Aix-Marseille Université, Centre d'Etudes Prospectives et d'Informations Internationales, Aix-Marseille Sciences Economiques, Coburg University of Applied Sciences, LabCorp (United States), Université de Poitiers, Laboratoire d’Economie de Poitiers
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $3,140
OpenAlex ID: W4403936418