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Growth at risk from climate change

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  • Michael T. Kiley

Abstract

How will climate change affect risks to economic activity? Research on climate impacts has tended to focus on effects on the average level of economic growth. I examine whether climate change may make severe contractions in economic activity more likely using quantile regressions linking growth to temperature. The effects of temperature on downside risks to economic growth are large and robust across specifications. These results suggest the growth at risk from climate change is large—climate change may make economic contractions more likely and severe and thereby significantly impact economic and financial stability and welfare.

Suggested Citation

  • Michael T. Kiley, 2024. "Growth at risk from climate change," Economic Inquiry, Western Economic Association International, vol. 62(3), pages 1134-1151, July.
    • Handle: RePEc:bla:ecinqu:v:62:y:2024:i:3:p:1134-1151
    DOI: 10.1111/ecin.13206
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    2. Md Yousuf Ali & Naif Alsagr & Nicholas Apergis & Manirul Islam, 2026. "Climate Risk and Capital Resilience in EU Deposit‐Taking Financial Institutions: Insights Into Environmental and Cultural Dynamics," Business Strategy and the Environment, Wiley Blackwell, vol. 35(3), pages 3740-3759, March.
    3. Claudia Foroni Paolo Gelain Marco Lorusso Massimiliano Marcellino, 2026. "Severe Weather and Financial (In)stability," BAFFI CAREFIN Working Papers 26266, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    4. Nabil Daher, 2026. "Is growth at risk from natural disasters? Evidence from quantile local projections," Post-Print hal-05466345, HAL.
    5. Belloc, Ignacio, 2024. "Family house prices in the US: Convergence clubs by county (1975-2022)," MPRA Paper 121487, University Library of Munich, Germany.
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    7. Foroni, Claudia & Gelain, Paolo & Marcellino, Massimiliano & Lorusso, Marco, 2026. "Severe weather and financial (in)stability," Working Paper Series 3211, European Central Bank.
    8. René Augusto Marín-Leyva & América I. Zamora-Torres & Carlos Francisco Ortiz-Paniagua, 2022. "Economía, energía y calidad ambiental en APEC, 1990-2018," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 17(4), pages 1-19, Octubre -.
    9. Francesco Lamperti & Giovanni Dosi & Andrea Roventini, 2025. "A Complex System Perspective on the Economics of Climate Change, Boundless Risk, and Rapid Decarbonization," LEM Papers Series 2025/16, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    10. Leventis, Flora & Palaios, Panagiotis, 2024. "Fresh evidence from temperature effects on growth and economic policy uncertainty: A panel quantile approach," The Journal of Economic Asymmetries, Elsevier, vol. 30(C).
    11. Emanuel Moench & Robin Schaal, 2025. "The impact of extreme weather events on the term structure of sovereign debt," Working Papers 11088, South African Reserve Bank.
    12. Richard S.J. Tol, 2025. "Climate Determinism Reborn," Working Paper Series 0725, Department of Economics, University of Sussex Business School.
    13. Fernando Rios-Avila & Andrey Ramos & Gustavo Canavire-Bacarreza & Leonardo Siles, 2026. "Estimation and Inference in Quantile Regressions with Multiple Fixed Effects," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper2615, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    14. Kumar, Naveen & Maiti, Dibyendu, 2025. "Climate change, state capacity and uneven growth: A disaggregated analysis of India," Economic Modelling, Elsevier, vol. 153(C).
    15. Giraldo, Carlos & Giraldo, Iader & Gomez-Gonzalez, Jose E. & Uribe, Jorge M., 2025. "Climate growth at risk in the global south," Energy Economics, Elsevier, vol. 149(C).
    16. Elif Duygu Kömürcüoğlu & Ömer Faruk Kömürcüoğlu & Umut Uzar, 2026. "Heterogeneous Impacts of Climate Change on Economic Growth in Emerging Seven Countries: A Novel Climate Change Index," Sustainable Development, John Wiley & Sons, Ltd., vol. 34(2), pages 1517-1532, April.
    17. Naveen Kumar & Dibyendu Maiti, 2025. "Distributional impacts of global warming on wealth inequality: evidence from global panel of regions," Empirical Economics, Springer, vol. 69(6), pages 3889-3933, December.

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    More about this item

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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