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The adverse consequences of global harvest and weather disruptions on economic activity

Abstract

Extreme weather events are expected to increase with climate change. Such events are detrimental for local economic activity but could also affect countries that are not directly exposed through global agricultural production shortfalls and price surges. Here, estimations for 75 countries show that increases in global agricultural commodity prices caused by harvest or weather disruptions in other regions of the world significantly curtail economic activity. The impact is considerably stronger in advanced countries, despite relatively lower shares of food in household expenditures. Effects are weaker when countries are net exporters of agricultural products, have large agricultural sectors and/or are less integrated in global markets for non-agricultural trade. Once we control for these characteristics, the relationship between the country’s income per capita and the economic repercussions becomes negative. Overall, these findings suggest that the consequences of climate change on advanced countries, particularly through food prices, may be larger than previously thought.

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Fig. 1: Evolution of global real agricultural commodity prices over time.
Fig. 2: Dynamic effects of global agricultural commodity market disruptions.
Fig. 3: Effects of global agricultural commodity market disruptions on other variables.
Fig. 4: Effects of global agricultural commodity market disruptions in advanced versus poor countries.
Fig. 5: Effects of global agricultural commodity market disruptions on country groups according to other characteristics.
Fig. 6: Influence of country characteristics on the magnitudes of the macroeconomic consequences of global agricultural market disruptions.

Data availability

The datasets used for this paper are available at: https://doi.org/10.5281/zenodo.4665886.

Code availability

The codes to reproduce the results of the paper are available at: https://doi.org/10.5281/zenodo.4665886.

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Acknowledgements

We acknowledge financial support from The Research Foundation Flanders (FWO), grant no. G020713N (G.P.). The UGent Special Research Fund (BOF) provided PhD scholarship for J.DeW.

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Correspondence to Gert Peersman.

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Supplementary discussion, Tables 1–4 and Figs. 1–13.

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De Winne, J., Peersman, G. The adverse consequences of global harvest and weather disruptions on economic activity. Nat. Clim. Chang. 11, 665–672 (2021). https://doi.org/10.1038/s41558-021-01102-w

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