Impact of climate change on output and inflation in Africa’s largest economies

Iliyasu, Jamilu; Mamman, Suleiman O.; Ahmed, Umar

doi:10.1080/17565529.2023.2172315

Cited by 10 publications

(6 citation statements)

References 47 publications

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“…Climate change is the next factor that increases food prices. Climate change reduces real output from its potential level and shifts the supply curve to the left, leading to a decrease in output supply and an increase in food prices (Iliyasu et al, 2023). Climate change will reduce agricultural productivity (between 2% and 15%) and raise food prices (between 1.3% and 56%) globally by 2050 (Delincé et al, 2015).…”

Section: Theoretical and Empirical Backgroundmentioning

confidence: 99%

Comparing the impacts of economic uncertainty, climate change, Covid-19, and the Russia-Ukraine conflict: Which is the most dangerous for EU27 food prices?

2024

Stud. Agr. Econ.

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Comparing the impacts of economic uncertainty, climate change, Covid-19, and the Russia-Ukraine conflict: Which is the most dangerous for EU27 food prices?This study compares the impact of economic uncertainty, climate change, Covid-19, and the Russia-Ukraine conflict on 27 European countries (EU27) food prices. The author used panel data that combines cross section data from January 2019 -March 2023 and time series data from 27 European countries. The error correction model (ECM) and Autoregressive Distributed Lag (ARDL) were used to analyse the data. The domestic energy consumer price index, real broad exchange rate, climate change, and Russia-Ukraine armed clashes are the drivers of the short and long run rise in the EU27 domestic food consumer price index. New domestic cases of Covid-19 can increase the EU27 domestic food consumer price index in the short run but not in the long run. Meanwhile, an increase in the unemployment rate has the potential to lower the EU27 domestic food consumer price index in both the short and long run. Among all the global shocks examined in this study, changes in the real broad exchange rate have the greatest impact on the EU27 domestic food consumer price index.

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Section: Theoretical and Empirical Backgroundmentioning

confidence: 99%

Comparing the impacts of economic uncertainty, climate change, Covid-19, and the Russia-Ukraine conflict: Which is the most dangerous for EU27 food prices?

2024

Stud. Agr. Econ.

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“…Research demonstrates that extreme temperatures due to climate change are a source of inflation. Empirical estimates for a variety of countries show that extreme temperatures lead to increases in food prices ranging from 0.38 to 3.23 percentage points (Bandara & Cai, 2014;Faccia et al, 2021;Iliyasu et al, 2023;Kotz et al, 2023;Yusifzada, 2023). This impact is heterogeneous depending on the goods considered, the season, and the characteristics of the country under analysis, including its monetary policy regime.…”

Section: The Environmental and Climate Crisis And Price Stabilitymentioning

confidence: 99%

“…This impact is heterogeneous depending on the goods considered, the season, and the characteristics of the country under analysis, including its monetary policy regime. The literature also shows that climate change has an impact on headline inflation, estimating the effect to lie between 0.3 and 2.6 percentage points (Ciccarelli et al, 2023;Iliyasu et al, 2023;Kabundi et al, 2022;Kotz et al, 2023;Mukherjee & Ouattara, 2021). According to findings by Natoli (2022) there is a small and at times non-significant deflationary effect of surprise temperature shocks on inflation in the U.S. A study by Cevik and Tovar Jalles (2023) conducted over the period from 1970 to 2020, and based on a sample of 173 countries, is the only example of an estimate that extreme temperatures result in lower headline inflation (a cumulative 3.5 percentage points over four years).…”

Section: The Environmental and Climate Crisis And Price Stabilitymentioning

confidence: 99%

Greener and cheaper: green monetary policy in the era of inflation and high interest rates

Aguila,

Wullweber

2024

Eurasian Econ Rev

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In recent years central bankers have devoted increased attention to the question of whether and how to intervene to address the growing environmental and climate crisis. The climate intervention debate gained momentum during a period of low inflation and loose monetary policy in core economies – a time characterised by near zero interest rates and large asset purchase programmes. Since 2021, however, the macroeconomic context has changed. Against this background, the paper analyses the contradictory and problematic nature of the direction monetary policy has taken in reaction to higher inflation. It argues that higher interest rates delay the green transformation by raising the cost of sustainable investments, and that the resulting delay also hampers prospects for achieving price stability. The paper concludes that the present macroeconomic environment demands a ‘greener and cheaper’ monetary policy approach designed to address the environmental and climate crisis and also to simultaneously fight inflation.

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“…In light of these perspectives, climate finance, as a form of aid, should be expected to reduce or stabilise food prices. empirical literature review Upon careful analysis of the existing literature, it was found that food inflation is influenced by several factors, such as a country's monetary policy, crude oil prices, exchange rate, and climate variability and extremes (Aron et al 2014;Mejía and Garcia-Diaz 2018;Akanni 2020;Kaur 2021;Dalheimer, Herwartz, and Lange 2021;Köse and Ünal 2022;Eregha 2022;Kunawotor et al 2022;Fernandes 2023;Iliyasu, Mamman, and Ahmed 2023). Some drivers of food prices have been reported in extant literature to include heavy reliance on biofuels, conflict, climate variability and extremes, and economic slowdowns and downturns (Mejía and Garcia-Diaz 2018; Food and Agriculture Organization of the United Nations n.d.; Kaur 2021;Okou, Spray, and Unsal 2022).…”

Section: Theoretical Literaturementioning

confidence: 99%

Is Climate Finance Helping Stabilise Food Prices in Sub-Saharan Africa?

Doku,

Phiri

2023

MGT

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This study explores the potential impact of climate finance (cf) on foodprices in Sub-Saharan Africa (SSA) as climate change continues to createfood scarcity and increase food prices. The study analyses data from43 SSA countries between 2006 and 2018 using a panel fixed effect modelwith Driscoll-Kraay standard errors and methods of moments quantile regressions(MMQR). The findings indicate that countries in SSA that receivemore cf, improve their fight against corruption, have good rainfall patterns,experience reduced extreme temperatures, have depreciated currencies,larger populations and higher GDP growth, reduce food imports, increasedomestic food supply, and demonstrate high governance and socialreadiness are likely to experience stable or reduced food prices. Based onthese results, the study recommends that SSA governments prioritise anticorruptionefforts to earn donor trust and increase CF, ultimately leadingto lower food prices in the sub-region. Further, the findings indicatethat good rainfall patterns reduce food prices: this shows the need for SSAcountries to invest in policies that lead to reliablewater supply as irrigation.

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Impact of climate change on output and inflation in Africa’s largest economies

Cited by 10 publications

References 47 publications

Comparing the impacts of economic uncertainty, climate change, Covid-19, and the Russia-Ukraine conflict: Which is the most dangerous for EU27 food prices?

Comparing the impacts of economic uncertainty, climate change, Covid-19, and the Russia-Ukraine conflict: Which is the most dangerous for EU27 food prices?

Greener and cheaper: green monetary policy in the era of inflation and high interest rates

Is Climate Finance Helping Stabilise Food Prices in Sub-Saharan Africa?

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