{"id":451033,"date":"2026-07-20T15:33:44","date_gmt":"2026-07-20T13:33:44","guid":{"rendered":""},"modified":"2026-07-20T16:11:26","modified_gmt":"2026-07-20T14:11:26","slug":"climate-change-and-economic-dynamics-temperature-dependent-shock-propagation","status":"publish","type":"publication","link":"https:\/\/www.wifo.ac.at\/en\/publication\/451033\/","title":{"rendered":"Climate Change and Economic Dynamics: Temperature-dependent Shock Propagation"},"content":{"rendered":"","protected":false},"featured_media":0,"template":"","class_list":["post-451033","publication","type-publication","status-publish","hentry"],"acf":{"subtitle":"","text":"The gradual transition between different climate states, as evidenced by the smooth rise in temperatures, motivates conceptualizing climate change as a phenomenon influencing the propagation mechanism of traditional macroeconomic shocks, rather than as an independent shock. We formalize this idea through a theoretical model, which shows that climate change induces a structural shift in the economy by steepening the aggregate supply curve, thereby exacerbating the price effects of demand shocks while dampening the output response. Our empirical evidence is consistent with this prediction: higher temperatures raise the share of inflation variation attributable to demand shocks by up to 10 percentage points, underscoring the role of climate change in intensifying stagflationary dynamics rather than independently driving business cycle fluctuations.","onlinedate":"2026-07-20 13:33:45","lang":"English","publication_series":"","publication_date":"20260717","publication_date_year":"","publication_date_full":true,"publication_num_pages":"128","keywords":"[\"Climate change\",\"Business cycles\",\"Inflation\",\"Interacted panel VAR\"]","jelcodes":"[\"C33\",\"E31\",\"E32\",\"Q54\"]","related_publications":"[]","pdf":451096,"zip":451098,"link":"","monthly_report":true,"monthly_report_main":false,"monthly_report_volume":"","monthly_report_pages":"","monthly_report_pages_sort":"0","issue":"730","journal":"WIFO Working Papers","publisher":"","invisible":false,"external":false,"embargo_date":null,"types":[44410],"research_groups":[3500],"collaboration":"","persons":[3543,3899],"persons_data":"[{\"personId\":3543,\"personName\":\"Christian Glocker\",\"organisationNames\":[]},{\"personId\":3899,\"personName\":\"Thomas Url\",\"organisationNames\":[]}]","clients":[],"subclients":[],"partners":[],"topics":[],"host_publication_title":"","host_publication_subtitle":"","place_of_publication":"","host_publication_editors":"[]","type_description":"","output_media":"","chapter":"","article_number":"","scientific_assistance":"[\"Czaloun Astrid\",\"Glauninger Ursula\"]","scientific_review":"[]","version":"","release_date":null,"expiration_date":null,"surveyor":"","research_assistance":"","edv":"","additional_info_de":"","additional_info_en":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.0 (Yoast SEO v28.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Climate Change and Economic Dynamics: Temperature-dependent Shock Propagation - WIFO<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.wifo.ac.at\/en\/publication\/451033\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Climate Change and Economic Dynamics: Temperature-dependent Shock Propagation\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.wifo.ac.at\/en\/publication\/451033\/\" \/>\n<meta property=\"og:site_name\" content=\"WIFO\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/WIFOat\/\" \/>\n<meta property=\"article:modified_time\" content=\"2026-07-20T14:11:26+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.wifo.ac.at\/wp-content\/uploads\/2024\/05\/WIFO-Gebaeude-FotoAlexanderMueller-www.alexandermueller.at-IMG_6326-Bearbeitet-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1920\" \/>\n\t<meta property=\"og:image:height\" content=\"1280\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@WIFOat\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.wifo.ac.at\\\/en\\\/publication\\\/451033\\\/\",\"url\":\"https:\\\/\\\/www.wifo.ac.at\\\/en\\\/publication\\\/451033\\\/\",\"name\":\"Climate Change and Economic Dynamics: Temperature-dependent Shock Propagation - WIFO\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.wifo.ac.at\\\/en\\\/#website\"},\"datePublished\":\"2026-07-20T13:33:44+00:00\",\"dateModified\":\"2026-07-20T14:11:26+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.wifo.ac.at\\\/en\\\/publication\\\/451033\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.wifo.ac.at\\\/en\\\/publication\\\/451033\\\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.wifo.ac.at\\\/en\\\/publication\\\/451033\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Startseite\",\"item\":\"https:\\\/\\\/www.wifo.ac.at\\\/en\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Climate Change and Economic Dynamics: Temperature-dependent Shock Propagation\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.wifo.ac.at\\\/en\\\/#website\",\"url\":\"https:\\\/\\\/www.wifo.ac.at\\\/en\\\/\",\"name\":\"\u00d6sterreichisches Institut f\u00fcr Wirtschaftsforschung\",\"description\":\"\",\"publisher\":{\"@id\":\"https:\\\/\\\/www.wifo.ac.at\\\/en\\\/#organization\"},\"alternateName\":\"WIFO\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.wifo.ac.at\\\/en\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\\\/\\\/www.wifo.ac.at\\\/en\\\/#organization\",\"name\":\"\u00d6sterreichisches Institut f\u00fcr Wirtschaftsforschung\",\"alternateName\":\"WIFO\",\"url\":\"https:\\\/\\\/www.wifo.ac.at\\\/en\\\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/www.wifo.ac.at\\\/en\\\/#\\\/schema\\\/logo\\\/image\\\/\",\"url\":\"https:\\\/\\\/www.wifo.ac.at\\\/wp-content\\\/uploads\\\/2024\\\/05\\\/WIFO_kurz_rechts-2-1920x412.jpg\",\"contentUrl\":\"https:\\\/\\\/www.wifo.ac.at\\\/wp-content\\\/uploads\\\/2024\\\/05\\\/WIFO_kurz_rechts-2-1920x412.jpg\",\"width\":2000,\"height\":429,\"caption\":\"\u00d6sterreichisches Institut f\u00fcr Wirtschaftsforschung\"},\"image\":{\"@id\":\"https:\\\/\\\/www.wifo.ac.at\\\/en\\\/#\\\/schema\\\/logo\\\/image\\\/\"},\"sameAs\":[\"https:\\\/\\\/www.facebook.com\\\/WIFOat\\\/\",\"https:\\\/\\\/x.com\\\/WIFOat\",\"https:\\\/\\\/linkedin.com\\\/company\\\/wifoat\\\/\",\"https:\\\/\\\/www.youtube.com\\\/@WIFO_at\"],\"description\":\"Das WIFO, 1927 von Friedrich August von Hayek und Ludwig von Mises zur Konjunkturanalyse gegr\u00fcndet, ist heute das f\u00fchrende Institut f\u00fcr angewandte empirische Wirtschaftsforschung in \u00d6sterreich mit starkem Engagement auf europ\u00e4ischer Ebene.\",\"email\":\"office@wifo.ac.at\",\"telephone\":\"+43 1 798 26 01 \u2013 0\",\"legalName\":\"\u00d6sterreichisches Institut f\u00fcr Wirtschaftsforschung\",\"foundingDate\":\"1927-01-02\",\"numberOfEmployees\":{\"@type\":\"QuantitativeValue\",\"minValue\":\"51\",\"maxValue\":\"200\"},\"publishingPrinciples\":\"https:\\\/\\\/www.wifo.ac.at\\\/institut\\\/mission-und-strategie\\\/\",\"ownershipFundingInfo\":\"https:\\\/\\\/www.wifo.ac.at\\\/institut\\\/organisation\\\/\",\"actionableFeedbackPolicy\":\"https:\\\/\\\/www.wifo.ac.at\\\/aktuelles\\\/presse\\\/\",\"correctionsPolicy\":\"https:\\\/\\\/www.wifo.ac.at\\\/institut\\\/kontakt\\\/\",\"ethicsPolicy\":\"https:\\\/\\\/www.wifo.ac.at\\\/institut\\\/evidenzbasierung-transparenz-und-unabhaengigkeit\\\/\",\"diversityPolicy\":\"https:\\\/\\\/www.wifo.ac.at\\\/institut\\\/gleichstellung\\\/\",\"diversityStaffingReport\":\"https:\\\/\\\/www.wifo.ac.at\\\/institut\\\/gleichstellung\\\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Climate Change and Economic Dynamics: Temperature-dependent Shock Propagation - WIFO","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.wifo.ac.at\/en\/publication\/451033\/","og_locale":"en_US","og_type":"article","og_title":"Climate Change and Economic Dynamics: Temperature-dependent Shock Propagation","og_url":"https:\/\/www.wifo.ac.at\/en\/publication\/451033\/","og_site_name":"WIFO","article_publisher":"https:\/\/www.facebook.com\/WIFOat\/","article_modified_time":"2026-07-20T14:11:26+00:00","og_image":[{"width":1920,"height":1280,"url":"https:\/\/www.wifo.ac.at\/wp-content\/uploads\/2024\/05\/WIFO-Gebaeude-FotoAlexanderMueller-www.alexandermueller.at-IMG_6326-Bearbeitet-1.jpg","type":"image\/jpeg"}],"twitter_card":"summary_large_image","twitter_site":"@WIFOat","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.wifo.ac.at\/en\/publication\/451033\/","url":"https:\/\/www.wifo.ac.at\/en\/publication\/451033\/","name":"Climate Change and Economic Dynamics: Temperature-dependent Shock Propagation - WIFO","isPartOf":{"@id":"https:\/\/www.wifo.ac.at\/en\/#website"},"datePublished":"2026-07-20T13:33:44+00:00","dateModified":"2026-07-20T14:11:26+00:00","breadcrumb":{"@id":"https:\/\/www.wifo.ac.at\/en\/publication\/451033\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.wifo.ac.at\/en\/publication\/451033\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.wifo.ac.at\/en\/publication\/451033\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Startseite","item":"https:\/\/www.wifo.ac.at\/en\/"},{"@type":"ListItem","position":2,"name":"Climate Change and Economic Dynamics: Temperature-dependent Shock Propagation"}]},{"@type":"WebSite","@id":"https:\/\/www.wifo.ac.at\/en\/#website","url":"https:\/\/www.wifo.ac.at\/en\/","name":"\u00d6sterreichisches Institut f\u00fcr Wirtschaftsforschung","description":"","publisher":{"@id":"https:\/\/www.wifo.ac.at\/en\/#organization"},"alternateName":"WIFO","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.wifo.ac.at\/en\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.wifo.ac.at\/en\/#organization","name":"\u00d6sterreichisches Institut f\u00fcr Wirtschaftsforschung","alternateName":"WIFO","url":"https:\/\/www.wifo.ac.at\/en\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.wifo.ac.at\/en\/#\/schema\/logo\/image\/","url":"https:\/\/www.wifo.ac.at\/wp-content\/uploads\/2024\/05\/WIFO_kurz_rechts-2-1920x412.jpg","contentUrl":"https:\/\/www.wifo.ac.at\/wp-content\/uploads\/2024\/05\/WIFO_kurz_rechts-2-1920x412.jpg","width":2000,"height":429,"caption":"\u00d6sterreichisches Institut f\u00fcr Wirtschaftsforschung"},"image":{"@id":"https:\/\/www.wifo.ac.at\/en\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/WIFOat\/","https:\/\/x.com\/WIFOat","https:\/\/linkedin.com\/company\/wifoat\/","https:\/\/www.youtube.com\/@WIFO_at"],"description":"Das WIFO, 1927 von Friedrich August von Hayek und Ludwig von Mises zur Konjunkturanalyse gegr\u00fcndet, ist heute das f\u00fchrende Institut f\u00fcr angewandte empirische Wirtschaftsforschung in \u00d6sterreich mit starkem Engagement auf europ\u00e4ischer Ebene.","email":"office@wifo.ac.at","telephone":"+43 1 798 26 01 \u2013 0","legalName":"\u00d6sterreichisches Institut f\u00fcr Wirtschaftsforschung","foundingDate":"1927-01-02","numberOfEmployees":{"@type":"QuantitativeValue","minValue":"51","maxValue":"200"},"publishingPrinciples":"https:\/\/www.wifo.ac.at\/institut\/mission-und-strategie\/","ownershipFundingInfo":"https:\/\/www.wifo.ac.at\/institut\/organisation\/","actionableFeedbackPolicy":"https:\/\/www.wifo.ac.at\/aktuelles\/presse\/","correctionsPolicy":"https:\/\/www.wifo.ac.at\/institut\/kontakt\/","ethicsPolicy":"https:\/\/www.wifo.ac.at\/institut\/evidenzbasierung-transparenz-und-unabhaengigkeit\/","diversityPolicy":"https:\/\/www.wifo.ac.at\/institut\/gleichstellung\/","diversityStaffingReport":"https:\/\/www.wifo.ac.at\/institut\/gleichstellung\/"}]}},"_links":{"self":[{"href":"https:\/\/www.wifo.ac.at\/en\/wp-json\/wp\/v2\/publication\/451033","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.wifo.ac.at\/en\/wp-json\/wp\/v2\/publication"}],"about":[{"href":"https:\/\/www.wifo.ac.at\/en\/wp-json\/wp\/v2\/types\/publication"}],"version-history":[{"count":1,"href":"https:\/\/www.wifo.ac.at\/en\/wp-json\/wp\/v2\/publication\/451033\/revisions"}],"predecessor-version":[{"id":451034,"href":"https:\/\/www.wifo.ac.at\/en\/wp-json\/wp\/v2\/publication\/451033\/revisions\/451034"}],"acf:post":[{"embeddable":true,"href":"https:\/\/www.wifo.ac.at\/en\/wp-json\/wp\/v2\/person\/3899"},{"embeddable":true,"href":"https:\/\/www.wifo.ac.at\/en\/wp-json\/wp\/v2\/person\/3543"},{"embeddable":true,"href":"https:\/\/www.wifo.ac.at\/en\/wp-json\/wp\/v2\/research_group\/3500"},{"embeddable":true,"href":"https:\/\/www.wifo.ac.at\/en\/wp-json\/wp\/v2\/publication_type\/44410"}],"wp:attachment":[{"href":"https:\/\/www.wifo.ac.at\/en\/wp-json\/wp\/v2\/media?parent=451033"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}