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What Are the Short- to Medium-Term Effects of Extreme Weather on the Croatian Economy?

Tihana Škrinjarić orcid id ; Bank of England, London, United Kingdom

Puni tekst: engleski pdf 758 Kb

str. 33-78

preuzimanja: 185



This research examines the short- to medium-term effects of weather changes on the Croatian economy by observing a simple model of an economy that includes changes in extreme weather events. Monthly data from 1999 to 2022 on the growth of the index of industrial production, inflation, energy inflation, changes in the unemployment rate, and selected weather variables are utilized to estimate several vector autoregression (VAR) models. The main finding indicates that inflation is mainly affected by weather shocks, especially drought. This means that monetary policy needs to consider this, mainly due to weather extremes being more frequent and of greater magnitudes. Furthermore, the insurance industry could also benefit from such findings due to the first quantification of such results on Croatian data.

Ključne riječi

climate change; weather effects; extreme weather; inflation

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