From Skies to Markets Implications of Extreme Weather Events for Macroeconomic and Financial Imbalances in CESEE Countries

Meri Papavangjeli ()
Additional contact information
Meri Papavangjeli: Bank of Albania, Sheshi Skenderbej, Nr.1, Tirana, Albania

No 2025/05, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: This study explores the heterogeneous and asymmetric macro-financial effects of climate change in CESEE countries, depending on the level of underlying macro-financial vulnerabilities. Focusing solely on acute physical risks - those arising from extreme weather events – it employs panel quantile regression analysis to examine data from 2000Q1-2022Q4 for 17 countries in the region. Notably, we find that climate shocks exacerbate macroeconomic and financial imbalances, increasing the susceptibility of already vulnerable economies to additional risks. Specifically, countries with higher economic imbalances suffer more severe output disruptions and heightened inflationary pressures following a climate shock. While the impact of climate shocks on external imbalances may be less pronounced, countries with existing vulnerabilities may still encounter pressures on trade and competitiveness. Additionally, climate shocks can intensify financial vulnerabilities for countries already grappling with lower levels of financial resilience.

Keywords: extreme weather events; macro-financial vulnerabilities; CESEE countries; panel quantile regression analysis (search for similar items in EconPapers)
JEL-codes: E51 E52 E61 E63 E65 (search for similar items in EconPapers)
Pages: 64 pages
Date: 2025-04, Revised 2025-04
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ies.fsv.cuni.cz/en/skies-markets-implicati ... ial-imbalances-cesee (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:fau:wpaper:wp2025_05

Access Statistics for this paper

More papers in Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies Contact information at EDIRC.
Bibliographic data for series maintained by Natalie Svarcova ().