Extreme weather events and economic activity: The case of low water levels on the Rhine river

Arbeitspapier

In this paper, we exploit exogenous variation in navigability of the Rhine river to analyze the impact of weather-related supply shocks on economic activity in Germany. Our analysis shows that low water levels lead to transportation disruptions that cause a significant and economically meaningful decrease of economic activity. In a month with 30 days of low water, industrial production in Germany declines by about 1 percent, ceteris paribus. Our analysis highlights the importance of extreme weather events for business cycle analysis and contributes to gauging the costs of extreme weather events in advanced economies. Furthermore, we provide a specific example for an idiosyncratic supply shock to a small sector that amplifies to an economically meaningful effect at the macroeconomic level.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Kiel Working Paper ; No. 2155

Classification and Topics

• Classification: Wirtschaft ; Business Fluctuations; Cycles ; Climate; Natural Disasters and Their Management; Global Warming
• Subject: Climate ; extreme weather events ; low water ; supply shocks ; business cycle effects

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ademmer, Martin ; Jannsen, Nils ; Mösle, Saskia
• Event: Veröffentlichung
• (who): Kiel Institute for the World Economy (IfW)
• (where): Kiel
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/216814
• Last update: 10.03.2025, 11:44 AM CET