Descriptions
ASB - SEACEN Online Seminar
Climate change has a profound impact on central banking, a field that you, as a professional in SEACEN Member Economies, are deeply involved in. It disrupts price stability due to unpredictable commodity price fluctuations and hampers economic growth by damaging infrastructure and reducing productivity. Our upcoming webinar, "Eye of the Storm: The Impact of Climate Shocks on Inflation and Growth," by Serhan Cevik, will delve into these crucial issues, providing valuable insights into how natural calamities and shifts in climate patterns can influence monetary policies and financial markets.
Furthermore, we are excited to introduce our new blog, "Addressing Climate Risks in Central Banks: Emerging Challenges for SEACEN Member Economies," which provides thought-provoking analysis and discussions on the intersection of climate dynamics and central banking. We encourage you to read and share this timely resource.
Date: Friday, 26 April
Time: 2pm
Speaker: Serhan Cevik, International Monetary Fund, Washington DC (Co-author: João Tovar Jalles)
Topic: Eye of the Storm: The Impact of Climate Shocks on Inflation and Growth
What is the impact of climate change on inflation and growth dynamics? This is not a simple question to answer, as climate shocks tend to be ubiquitous, but with opposing effects simultaneously on demand and supply. The extent of which climate-related shocks affect inflation and economic growth also depends on long-run scarring in the economy and the country’s fiscal and institutional capacity to support recovery. In this paper, we use the local projection method to empirically investigate how climate shocks, as measured by climate-induced natural disasters, influence inflation and economic growth in a large panel of countries over the period 1970–2020. The results show that both inflation and real GDP growth respond significantly but also differently in terms of direction and magnitude to different types of disasters caused by climate change. We split the full sample of countries into income groups—advanced economies and developing countries—and find a striking contrast in the impact of climate shocks on inflation and growth according to income level, state of the economy, and fiscal space when the shock hits.
