Journal Article

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

Authors

  • Martin Ademmer
  • Nils Jannsen
  • Saskia Meuchelböck
Publication Date

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.

Kiel Institute Expert

Info

JEL Classification
E32, Q54
DOI
10.1515/ger-2022-0077

Key Words

  • Climate
  • Extreme Weather Events
  • Supply Shocks
  • Business Cycle Effects
  • Transportation Disruption

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