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Determining the Inflationary Effects of El Niño and La Niña in the Philippines

Author

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  • Agustin L. Arcenas

    (School of Economics, University of the Philippines Diliman)

Abstract

This paper investigates whether climate "shocks" (or short-term but sharp changes in climatic conditions), El Niño and La Niña, have significant impacts on inflation in the country. Using regional panel data and information from PAGASA, this study finds that both of these weather shocks have significant effects on the general price level in the Philippines, along with interest rate, foreign exchange, and unemployment rate. Further, the results also indicate that long-term changes in climatic conditions, specifically average temperature and rainfall, do not have any significant impacts on prices. These findings are consistent with the literature that point to the fact that successful adaptation to long-term changes in climatic conditions negates any potential negative impacts to the economy. The study concludes that adaptation must be expanded not only to respond to long-term changes in climatic conditions, but also to short-term but intense changes in temperature and rainfall.

Suggested Citation

  • Agustin L. Arcenas, 2018. "Determining the Inflationary Effects of El Niño and La Niña in the Philippines," UP School of Economics Discussion Papers 201802, University of the Philippines School of Economics.
    • Handle: RePEc:phs:dpaper:201802
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    File URL: https://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1514
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Inflation; El Niño; La Niña; climate change;
    All these keywords.

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • E00 - Macroeconomics and Monetary Economics - - General - - - General

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