Growth at Risk from Climate Change

19 Pages Posted: 23 Aug 2021

See all articles by Michael T. Kiley

Michael T. Kiley

Board of Governors of the Federal Reserve System

Date Written: August, 2021

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.

JEL Classification: E23, O13, Q54, Q56

Suggested Citation

Kiley, Michael T., Growth at Risk from Climate Change (August, 2021). FEDS Working Paper No. 2021-54, Available at SSRN: https://ssrn.com/abstract=3907717 or http://dx.doi.org/10.17016/FEDS.2021.054

Michael T. Kiley (Contact Author)

Board of Governors of the Federal Reserve System ( email )

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