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The impact of climate change on inflation in Tunisia: evidence from the asymmetric NARDL model

Author

Listed:
  • Oussama Zouabi

    (LEAD - Laboratoire d'Économie Appliquée au Développement - UTLN - Université de Toulon, UTLN - Université de Toulon)

  • Michel Dimou

    (LEAD - Laboratoire d'Économie Appliquée au Développement - UTLN - Université de Toulon, UTLN - Université de Toulon)

Abstract

This paper aims to examine the relationship between climate shocks and agri-food and overall inflation in Tunisia for the period 1985-2000. Climate shocks represent extreme weather phenomena such as droughts, heat waves, and floods To address this question, the paper uses an extensive Nonlinear Autoregressive Distributed Lag (NARDL) model that incorporates a Pesaran cointegration test, enabling the exploration of potential asymmetric effects stemming from positive and negative climate shocks on both general and agri-food inflation in the short and the long run. The key findings of the paper indicate that positive temperature shocks exert a significant inflationary impact on all agricultural products, the food industry, and, more broadly, the entire Tunisian economy, both in the short and long term. Conversely, a sudden shortage in rainfall does not significantly affect either agricultural or food prices, nor does it influence the general price index. This result is rather unexpected since long-term rainfall trends significantly affect agricultural production, emphasizing the importance of appropriate agricultural policies such as irrigation.

Suggested Citation

  • Oussama Zouabi & Michel Dimou, 2024. "The impact of climate change on inflation in Tunisia: evidence from the asymmetric NARDL model," Post-Print hal-04985855, HAL.
  • Handle: RePEc:hal:journl:hal-04985855
    DOI: 10.1007/s10018-024-00398-0
    Note: View the original document on HAL open archive server: https://hal.science/hal-04985855v1
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    More about this item

    Keywords

    Tunisia; Climate shocks; NARDL model; Climate inflation; Climate change Agriculture climate inflation NARDL Tunisia Q50 Q54 Q10 P24 C15; Climate change; Agriculture; climate inflation; NARDL; Tunisia Q50; Q54; Q10; P24; C15;
    All these keywords.

    JEL classification:

    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • P24 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • P24 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General

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