## The Economic Costs of Temperature Uncertainty

_IMF Working Papers, January 24, 2025_

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## Bibliographic details
- Authors: Luca Bettarelli, Davide Furceri, Michael Ganslmeier, Marc Schiffbauer
- Published: January 24, 2025
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400295119.001

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### Summary
- Combines novel high-frequency geospatial temperature data from satellites with measures of economic activity for the universe of US listed firms.
- Examines temperature uncertainty as a channel through which global warming can lead to economic costs.
- Main conclusion: temperature uncertainty persistently reduces firms’ investment and sales.

### Authors and publication
- By Luca Bettarelli, Davide Furceri, Michael Ganslmeier, Marc Schiffbauer
- January 24, 2025
- IMF Working Papers 2025, 026 (Working Paper No. 2025/026)

### Data and scope
- High-frequency geospatial temperature data from satellites.
- Measures of economic activity for the universe of US listed firms.
- Pages: 59
- Volume: 2025
- Issue: 026
- DOI: https://doi.org/10.5089/9798400295119.001
- Stock No: WPIEA2025026
- ISBN: 9798400295119
- ISSN: 1018-5941

### Key findings
- Temperature uncertainty increases power outages.
- Temperature uncertainty reduces labor productivity.
- Temperature uncertainty increases the degree of exposure of firms to environmental and non-political risks.
- Temperature uncertainty increases economic uncertainty at the firm-level.
- These channels lead to persistent reductions in firms’ investment and sales.
- Heterogeneous effects: firms characterized by tighter financial constraints are disproportionately more affected.

### Subject areas and keywords
- Subject: Climate change, Employment, Environment, Labor, Labor productivity, Natural disasters, Production
- Keywords: Climate change, Employment, Firms., firms' characteristic, firms' investment, Global, impact of Temperature volatility, Labor productivity, Natural disasters, temperature data, temperature uncertainty, Temperature Volatility, Temperatures, Uncertainty

*Content based on "The Economic Costs of Temperature Uncertainty", IMF Working Papers 2025, 026.*

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_Source: https://www.imf.org/en/publications/wp/issues/2025/01/24/the-economic-costs-of-temperature-uncertainty-559306_