The impact of extreme weather events on budget balances and implications for fiscal policy

This paper explores implications of climate change for fiscal policy by assessing theimpact of large scale extreme weather events on changes in public budgets. We applyalternative measures for large scale extreme weather events and conclude that thebudgetary impact of such events ranges between 0.23% and 1.1% of GDP dependingon the country group. Developing countries face a much larger effect on changes inbudget balances following an extreme weather event than do advanced economies.Based on these findings, we discuss implications ...