Macroeconomic Spillovers of Weather Shocks Across U.S. States

Emanuele Bacchiocchi, Andrea Bastianin and Graziano Moramarco

Oxford Bulletin of Economics and Statistics, 2026, vol. 88, issue 1, 141-156

Abstract: We estimate the short‐run effects of weather‐related disasters on local economic activity and cross‐border spillovers that operate through economic linkages between U.S. states. To this end, we use emergency declarations triggered by natural disasters and estimate their effects using a monthly global vector autoregressive (GVAR) model for U.S. states. Impulse responses highlight the nationwide effects of weather‐related disasters that hit individual regions. Taking into account economic linkages between states allows capturing much stronger spillovers than those associated with mere spatial proximity. The results underscore the importance of geographic heterogeneity for impact evaluation and the critical role of supply‐side propagation mechanisms.

Date: 2026
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https://doi.org/10.1111/obes.70011

Related works:
Working Paper: Macroeconomic Spillovers of Weather Shocks across U.S. States (2025)
Working Paper: Macroeconomic Spillovers of Weather Shocks across U.S. States (2024)
Working Paper: Macroeconomic Spillovers of Weather Shocks across U.S. States (2024)
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