SOAS Research Online

A Free Database of the Latest Research by SOAS Academics and PhD Students

[skip to content]

Beirne, John, Dafermos, Yannis, Kriwoluzky, Alexander, Renzhi, Nuobu, Volz, Ulrich and Wittich, Jana (2021) The Effects of Natural Disasters on Price Stability in the Euro Area. London: SOAS Department of Economics Working Paper No. 244.

[img]
Preview
Text - Published Version
Download (3MB) | Preview

Abstract

This paper investigates the impact of natural disasters on price stability in the euro area. We estimate panel and country-specific structural vector autoregression (VAR) models by combining estimated damages of disaster events with monthly data for the Harmonised Index of Consumer Prices (HICP) for all euro area countries over the period 1996-2021. Besides estimating the effect on overall headline inflation, we examine effects on its 12 main sub-indices and further sub-categories of food price inflation. This allows us to disentangle differences in the direction and strength of price effects across consumption categories. Our results suggest significant positive effects of natural disasters on overall headline inflation, with diverging results at the sub-index level. Positive inflation effects are particularly pronounced for prices of food and beverages, while negative effects prevail for other sub-indices. Our country-specific results suggest heterogeneous inflation effects of natural disasters across different countries. A key implication of our findings is that climate change is likely to make it increasingly difficult for the European Central bank to achieve its inflation target.

Item Type: Monographs and Working Papers (Working Paper)
SOAS Departments & Centres: Departments and Subunits > Department of Economics
ISSN: 17535816
Date Deposited: 27 Nov 2021 10:33
URI: https://eprints.soas.ac.uk/id/eprint/36029

Altmetric Data

There is no Altmetric data currently associated with this item.

Statistics

Download activity - last 12 monthsShow export options
Downloads since deposit
6 month trend
218Downloads
6 month trend
149Hits
Accesses by country - last 12 monthsShow export options
Accesses by referrer - last 12 monthsShow export options

Repository staff only

Edit Item Edit Item