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

Jannsen, Nils; Meuchelböck, Saskia

doi:https://dx.doi.org/10.1515/ger-2022-0077

Journal Article

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

German Economic Review, 24 (2): 121–144

Autoren

Ademmer
M.
Jannsen
N.
Meuchelböck
S.

Erscheinungsdatum: 03/2023

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.