IMF Working Papers

A New Perspective on Temperature Shocks

By Nooman Rebei

February 21, 2025

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Format: Chicago

Nooman Rebei. "A New Perspective on Temperature Shocks", IMF Working Papers 2025, 042 (2025), accessed April 4, 2025, https://doi.org/10.5089/9798229001205.001

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Prevailing research suggests that climate change disproportionately burdens emerging markets and developing economies with greater output losses compared to advanced economies, positing that colder regions are less impacted than their warmer counterparts. This study revisits the empirical relationship between temperature fluctuations and real growth, with a novel focus on differentiating between transitory versus permanent temperature shifts, aligning naturally with the definitions of weather and climate change, respectively. Our findings reveal that richer and colder economies exhibit better adaptation only in response to weather shocks, whereas the pattern reverses for climate change disturbances, challenging the conclusions of previous studies.

Subject: Climate change, Environment, Natural disasters

Keywords: Bayesian estimation, Climate change, Climate change disturbance, Climate damages, Climate projection data, Definitions of weather, Global, Kalman filter, Natural disasters, Temperature shock, Temporary and permanent shocks, Transitory shock

Publication Details

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