A1220
Title: Vulnerability to climate change: Evidence from a dynamic factor model
Authors: Fulvia Marotta - Queen Mary University of London (United Kingdom) [presenting]
Haroon Mumtaz - Queen Mary University of London (United Kingdom)
Abstract: Using a dynamic factor model with stochastic volatility, the synchronization of temperature and precipitation changes are examined across countries and regions. By doing so, the implications for the medium-term economic outlook and vulnerability to climate risks are analyzed. Findings reveal that a common factor explains a significant portion of temperature variance globally, with the largest contribution observed in sub-Saharan Africa, Latin America, and Asia. Additionally, the common factor accounts for the increase in temperature levels across these regions. In contrast, precipitation fluctuations exhibit more localized patterns. It is found that countries with higher GDP per capita tend to have lower exposure to global temperature changes.
