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Macroeconomic Spillovers of Weather Shocks across U.S. States

Emanuele Bacchiocchi, Andrea Bastianin, Graziano Moramarco

arXiv 16 Mar 2024 · Econometrics · publishedOxford Bulletin of Economics and Statistics (2025) · 3 citations (OpenAlex)

arXiv:2403.10907 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We estimate the short-run effects of weather-related disasters on local economic activity and cross-border spillovers that operate through economic linkages between U.S. states. To this end, we use emergency declarations triggered by natural disasters and estimate their effects using a monthly Global Vector Autoregressive (GVAR) model for U.S. states. Impulse responses highlight the nationwide effects of weather-related disasters that hit individual regions. Taking into account economic linkages between states allows capturing much stronger spillovers than those associated with mere spatial proximity. The results underscore the importance of geographic heterogeneity for impact evaluation and the critical role of supply-side propagation mechanisms.

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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Kim, H. S., Matthes, C., and Phan, T (2025) Severe weather and the macroeconomy0.87452100%
2Dées, S., di Mauro, F., Pesaran, M. H., and Smith, L. V (2007) Exploring the international linkages of the euro area: A global VAR analysis0.73732100%
3Feng, A., Li, H., and Wang, Y (2025) We are all in the same boat: Cross-border spillovers of climate shocks through international trade and supply chain0.73732100%
4Barrot, J.-N. and Sauvagnat, J (2016) Input specificity and the propagation of idiosyncratic shocks in production networks0.64422100%
5Boehm, C. E., Flaaen, A., and Pandalai-Nayar, N (2019) Input linkages and the transmission of shocks: Firm-level evidence from the 2011 Tōhoku earthquake0.64422100%
6Forslid, R. and Sanctuary, M (2023) Climate risks and global value chains: The impact of the 2011 Thailand flood on Swedish firms0.64422100%
7Kashiwagi, Y., Todo, Y., and Matous, P (2021) Propagation of economic shocks through global supply chains—evidence from Hurricane Sandy0.64422100%
8Aznar-Siguan, G. and Bresch, D. N (2019) CLIMADA v1: a global weather and climate risk assessment platform0.64422100%
9Pesaran, M. H., Schuermann, T., and Weiner, S. M (2004) Modeling regional interdependencies using a global error correcting macroeconometric model0.64422100%
10Roth Tran, B. and Wilson, D. J (2020) The local economic impact of natural disasters0.58531100%

Showing the top 10 of 42 scored citations.