REPLICATION FILES
=================

Paper:
  Christian Glocker and Thomas Url (2026)
  "Climate Change and Economic Dynamics: Temperature-Dependent Shock Propagation"

Contents of this folder
------------------------
- climate_macro_Glocker_Url_wifoWP.pdf
    The working paper itself.

- macro_climate_change/data/
    The underlying data used in the study: quarterly and annual
    macroeconomic data for 20 countries plus global aggregates
    (macrodata.xlsx, macrodata_annual.xlsx), country/global temperature
    series (temp_dat_berkley.xlsx, global_temp_long_series.xlsx),
    rainfall data (Rain_Quartal_1960_2023.xlsx), and natural-disaster
    damage data (damage.xlsx, damage_mdfd.xlsx).

- macro_climate_change/PVAR/
    MATLAB scripts implementing the paper's empirical model: a
    block-exogenous, interacted panel Bayesian VAR (country blocks that
    are block-exogenous with respect to a global block, with country
    temperature anomalies entering as an interaction variable).

    MAIN FILE: block_exogenous_ibvar_model.m
    This is the main script to run in order to replicate the paper's
    core results. It:
      1) loads and arranges the data (via arranging_data.m),
      2) estimates the global VAR block and, for each country, the
         country VAR block with the temperature-interaction terms,
      3) stacks these into the block-exogenous panel VAR
         (bvar_stack_block_exo.m),
      4) computes impulse responses and forecast error variance
         decompositions across the range of the interaction variable
         (temperature anomaly), identified via sign restrictions
         (bvar_sign_H.m / irfs_fevds_sign_H_plots.m),
      5) produces the figures showing how shock propagation
         (impulse responses / variance decompositions) changes with the
         level of temperature anomaly — the paper's key figures.

    Other files in this folder (arranging_data.m, rain_anomaly.m,
    bvar_sign_A.m, bvar_sign_H.m, getqr.m,
    irfs_fevds_sign_A_plots.m / irfs_fevds_sign_H_plots.m) are
    helper/sub-routines called by the main script.

- MatCodes/
    General-purpose MATLAB function libraries required by the scripts
    in PVAR/ (added to the MATLAB path at the top of
    block_exogenous_ibvar_model.m):
      - MatCodes/bvar/            Bayesian VAR estimation, IRF, and
                                    FEVD routines (also contains a
                                    generic, non-interacted version,
                                    block_exogenous_bvar.m).
      - MatCodes/tempdisaggr/      Temporal disaggregation routines
                                    (e.g. Chow-Lin, used to convert
                                    annual global GDP to quarterly).
      - MatCodes/supplementaryStuff/  Plotting/formatting helper
                                    functions used in the figures.

How to run
----------
Open MATLAB, set the paths in block_exogenous_ibvar_model.m (the
addpath(...) lines near the top and gf.cptpth, which point to the
MatCodes subfolders and to macro_climate_change/data/) to match your
local folder locations, then run the script. It will reproduce the
paper's block-exogenous interacted panel VAR estimates and the
associated impulse-response/variance-decomposition figures.
