Arbeitspapier
Agricultural Price Shocks and Business Cycles - A Global Warning for Advanced Economies
For a panel of 75 countries, we find that increases in global agricultural commodity prices that are caused by unfavorable harvest shocks in other regions of the world significantly curtail domestic economic activity. The effects are much larger than for average global agricultural price shifts. The impact is also considerably stronger in high-income countries, despite the lower shares of food in household expenditures these countries have compared to low-income countries. On the other hand, we find weaker effects in countries that are net exporters of agricultural products, have higher shares of agriculture in GDP or lower shares of non-agricultural trade in GDP; that is, characteristics that typically apply to low-income countries. When we control for these country characteristics, we find indeed that the effects on economic activity become smaller when income per capita is higher. Overall, our findings imply that the consequences of climate change on advanced economies are likely larger than previously thought.
- Language
-
Englisch
- Bibliographic citation
-
Series: CESifo Working Paper ; No. 7037
- Classification
-
Wirtschaft
Business Fluctuations; Cycles
International Business Cycles
Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
Environment and Growth
Agriculture: Aggregate Supply and Demand Analysis; Prices
Climate; Natural Disasters and Their Management; Global Warming
- Subject
-
agricultural commodity prices
economic activity
climate change
- Event
-
Geistige Schöpfung
- (who)
-
De Winne, Jasmien
Peersman, Gert
- Event
-
Veröffentlichung
- (who)
-
Center for Economic Studies and ifo Institute (CESifo)
- (where)
-
Munich
- (when)
-
2018
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- De Winne, Jasmien
- Peersman, Gert
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2018
Other Objects (12)
Investment shocks and business cycles
Investment shocks and business cycles
Growth cycles in mature and dual economies
Political stabilization cycles in high inflation economies
Global Credit Shocks and Real Economies
Global Credit Shocks and Real Economies
Agency costs, risk shocks and international cycles
Seasonal cycles in European agricultural commodity prices
Taxation and political business cycles in EU economies
Taxation and political business cycles in EU economies
Propagation of nominal shocks in open economies
Emerging economies, trade policy, and macroeconomic shocks
Investment shocks and business cycles
Investment shocks and business cycles
Growth cycles in mature and dual economies
Political stabilization cycles in high inflation economies
Global Credit Shocks and Real Economies
Global Credit Shocks and Real Economies
Agency costs, risk shocks and international cycles
Seasonal cycles in European agricultural commodity prices
Taxation and political business cycles in EU economies
Taxation and political business cycles in EU economies
Propagation of nominal shocks in open economies
Emerging economies, trade policy, and macroeconomic shocks
Investment shocks and business cycles
Investment shocks and business cycles
Growth cycles in mature and dual economies
Political stabilization cycles in high inflation economies
Global Credit Shocks and Real Economies
Global Credit Shocks and Real Economies
Agency costs, risk shocks and international cycles
Seasonal cycles in European agricultural commodity prices
Taxation and political business cycles in EU economies
Taxation and political business cycles in EU economies
Propagation of nominal shocks in open economies