Going NUTS: The regional impact of extreme climate events over the medium term

Sehrish Usman, Guzmán González-Torres Fernández and Miles Parker

European Economic Review, 2025, vol. 178, issue C

Abstract: The projected increase in extreme climate events in the coming decades is likely to exacerbate the existing productivity and demographic challenges facing Europe. We study the dynamic, medium-run macroeconomic effects of heatwaves, droughts and floods in 1160 EU regions through the lens of a local projections, difference in difference framework. These events reduce output not only on impact but also into the medium term. Output is 1.5 percentage points lower two years after a summer heatwave, 3 percentage points lower four years after a drought and 2.8 percentage points lower four years after a flood. Both lower regional population and lower labour productivity per hour worked contribute to the medium-term decline.

Keywords: Extreme weather; Regional output; Productivity (search for similar items in EconPapers)
JEL-codes: D24 E24 J22 Q54 R11 (search for similar items in EconPapers)
Date: 2025
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Working Paper: Going NUTS: the regional impact of extreme climate events over the medium term (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:178:y:2025:i:c:s001429212500131x

DOI: 10.1016/j.euroecorev.2025.105081

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