Titolo della tesi: Macroeconomic Dynamics in a Warming World: Essays on Climate, Energy, and Food Markets
Climate variability and its economic implications are at the core of this dissertation. As climate anomalies increasingly disrupt economic activity across the globe, understanding their macroeconomic effects is critical for policymakers, businesses, and researchers. Climate-driven supply and demand shocks affect key economic indicators, including inflation, price volatility, and output fluctuations, often in asymmetric and nonlinear ways. This dissertation examines these relationships through three distinct but interrelated chapters, each focusing on a different dimension of the interaction between climate variability and the macroeconomy.
Chapter 1 investigates how temperature anomalies influence energy prices and inflation in the Euro Area. Employing a local projection framework, the analysis accounts for both linear and nonlinear responses to warm and cold spells. The results indicate that warmer temperature anomalies tend to reduce energy demand, exerting moderate deflationary pressure, while colder-than-normal temperatures increase heating needs, leading to persistent inflationary effects. Additionally, the transmission of temperature anomalies to inflation is shown to be influenced by the composition of a country’s energy mix: economies with a higher share of low-carbon energy sources exhibit weaker price responses, while those with more carbon-intensive energy structures experience stronger short-term effects. These findings highlight the role of energy dependence in shaping inflationary dynamics and underscore the potential of renewable energy adoption in mitigating climate-induced volatility.
Chapter 2 examines the effects of weather anomalies and harvest disruptions on global agricultural commodity prices, with a particular focus on the role of inventories in amplifying or dampening price volatility. The chapter introduces a novel global weather shock index that accounts for both the spatial distribution of crop production and the seasonality of agricultural cycles. By incorporating gridded weather data, crop-specific planting and harvesting calendars, and export-weighted aggregation, the index provides a comprehensive measure of climate-induced supply shocks in global food markets. The empirical results reveal that adverse supply shocks, such as droughts and poor harvests, lead to substantial increases in food prices, while favorable shocks have a more limited effect. Moreover, the presence of low inventory levels exacerbates the impact of negative shocks, reinforcing the importance of storage buffers in stabilizing agricultural markets. These findings provide new insights into the asymmetric transmission of climate shocks to food prices and the role of inventory management in mitigating price volatility.
Chapter 3 explores the role of temperature forecast errors in shaping energy price dynamics, particularly in the European gas market. While previous literature has often assumed that temperature and economic activity do not exhibit contemporaneous feedback at high frequencies, this chapter challenges that assumption by analyzing a unique historical dataset of temperature forecasts. The results demonstrate that short-range temperature forecast errors—defined as deviations from expected temperatures in forecasts up to five days ahead—serve as a credible measure of exogenous temperature shocks. By distinguishing between expected forecast updates and unexpected temperature surprises, the analysis identifies distinct transmission mechanisms affecting both energy and non-energy sectors. This approach enhances the understanding of how weather information is incorporated into market expectations and highlights the significance of real-time climate data for energy market stability and macroeconomic forecasting.
Collectively, the three chapters contribute to the broader literature on climate and the macroeconomy by providing robust empirical evidence on the differential effects of climate anomalies across energy and food markets. The findings emphasize the asymmetric nature of supply shocks, the critical role of inventories in food price stabilization, and the importance of accurate weather forecasting for energy price formation. These insights have significant policy implications: ensuring adequate stock management, improving the transparency of inventory data, and advancing forecasting capabilities can help mitigate the economic risks associated with climate variability. As climate change intensifies the frequency and severity of extreme weather events, the need for adaptive policy measures and market-based responses becomes increasingly urgent. By addressing these pressing challenges, this dissertation lays the groundwork for future research on the adaptation strategies of economic agents and the long-term macroeconomic consequences of climate variability.