Assessing the macroeconomic impact of weather shocks in Colombia

Arbeitspapier

In this paper, we investigate the impact of adverse weather shocks on Colombian economic activity, with a particular emphasis on the effects on agricultural output, food and headline inflation. Existing literature and empirical evidence suggest that adverse weather shocks, such as those related to the El Niño event in 2015-2016, lead to decreases in agricultural output and increases in inflation without significantly affecting total GDP growth. To further assess this result, we evaluate the impact of ENSO fluctuations using a BVAR-X model. Based on these findings, we propose a small open economy New Keynesian model that introduces a novel channel through which relative prices (agricultural vs. non-agricultural) are affected by weather shocks, allowing us to incorporate this empirical evidence into a structural model for Colombia.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Graduate Institute of International and Development Studies Working Paper ; No. HEIDWP14-2023

Classification and Topics

• Classification: Wirtschaft ; Climate; Natural Disasters and Their Management; Global Warming ; Monetary Policy ; Price Level; Inflation; Deflation
• Subject: Weather shocks ; El Niño Southern Oscillation (ENSO) ; Small Open Economy New Keynesian Models

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Romero, José Vicente ; Naranjo-Saldarriaga, Sara ; Muñoz, Jonathan Alexander
• Event: Veröffentlichung
• (who): Graduate Institute of International and Development Studies
• (where): Geneva
• (when): 2023

Further information

• Handle: http://hdl.handle.net/10419/283385
• Last update: 10.03.2025, 11:41 AM CET