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Extreme Weather Events and Economic Activity: The Case of Low Water Levels on the Rhine River

Author

Listed:
  • Ademmer Martin

    (Bloomberg LP, Neue Mainzer Str. 75, 60311 Frankfurt am Main, Germany)

  • Jannsen Nils

    (Kiel Institute for the World Economy, Kiellinie 66, 24105 Kiel, Germany)

  • Meuchelböck Saskia

    (Kiel Institute for the World Economy, Kiellinie 66, 24105 Kiel, Germany)

Abstract

We make use of historical data on water levels on the Rhine river to analyze the impact of weather-related supply shocks on economic activity in Germany. Our analysis shows that low water levels lead to severe disruptions in inland water transportation and cause a significant and economically meaningful decrease of economic activity. In a month with 30 days of low water, industrial production in Germany declines by about 1 percent, ceteris paribus. Our analysis highlights the importance of extreme weather events for business cycle analysis and contributes to gauging the costs of extreme weather events in advanced economies.

Suggested Citation

  • Ademmer Martin & Jannsen Nils & Meuchelböck Saskia, 2023. "Extreme Weather Events and Economic Activity: The Case of Low Water Levels on the Rhine River," German Economic Review, De Gruyter, vol. 24(2), pages 121-144, May.
    • Handle: RePEc:bpj:germec:v:24:y:2023:i:2:p:121-144:n:4
    DOI: 10.1515/ger-2022-0077
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    Cited by:

    1. Boysen-Hogrefe, Jens & Groll, Dominik & Hoffmann, Timo & Jannsen, Nils & Kooths, Stefan & Meuchelböck, Saskia & Sonnenberg, Nils, 2022. "Deutsche Wirtschaft im Herbst 2022 - Konjunktur auf Entzug [German Economy Autumn 2022 - Consumption-driven recession]," Kieler Konjunkturberichte 95, Kiel Institute for the World Economy (IfW Kiel).
    2. Hungerland Wolf-Fabian & Altmeppen Christoph, 2024. "Climate Change in the EU’s Macroeconomic Imbalance Procedure," Intereconomics: Review of European Economic Policy, Sciendo, vol. 59(3), pages 176-182.

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    More about this item

    Keywords

    climate; extreme weather events; supply shocks; business cycle effects; transportation disruption;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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