Demand or supply? An empirical exploration of the effects of climate change on the macroeconomy

Arbeitspapier

Using a panel of 24 OECD countries for the sample 1990-2019 and a standard macroeconomic framework, the paper tests the combined macroeconomic effects of climate change, environmental policies and technology. Overall, we find evidence of significant macroeconomic effects over the business cycle: physical risks act as negative demand shocks while transition risks as downward supply movements. The disruptive effects on the economy are exacerbated for countries without carbon tax or with a high exposure to natural disasters. In general, results support the need for a uniform policy mix to counteract climate change with a balance between demand-pull and technology-push policies.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 933

Classification and Topics

• Classification: Wirtschaft ; Bayesian Analysis: General ; Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models ; Business Fluctuations; Cycles ; Central Banks and Their Policies
• Subject: Environmental policy ; Environment-related technologies ; Physicalrisks ; Business cycle ; SVAR

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ciccarelli, Matteo ; Marotta, Fulvia
• Event: Veröffentlichung
• (who): Queen Mary University of London, School of Economics and Finance
• (where): London
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/260503
• Last update: 10.03.2025, 11:44 AM CET