Climate extremes and inflation: evidence from Italian regional data

Alessandro Mistretta

No 988, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: This paper empirically investigates the impact of climate extremes on inflation, focusing on Italy and providing complementary evidence for the euro area. Using Italian regional data (NUTS2), which better capture the localized nature of climate extremes, it finds that extremely high temperatures generally exert downward pressure on inflation, whereas extremely low temperatures have a pronounced positive effect, mainly driven by energy price dynamics. Extreme precipitation is associated with decreases in energy prices. These findings highlight the need for central banks to incorporate climate-related shocks into their inflation assessments and policy frameworks.

Keywords: inflation; climate change; climate extremes (search for similar items in EconPapers)
JEL-codes: O1 Q5 R3 (search for similar items in EconPapers)
Date: 2025-12
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.bancaditalia.it/pubblicazioni/qef/2025-0988/QEF_988_25.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_988_25

Access Statistics for this paper

More papers in Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area Contact information at EDIRC.
Bibliographic data for series maintained by ().