This paper explores how climate risks adversely affect fiscal space using panel local projections covering 199 economies spanning from 1990 to 2022.
Authors
Beirne, John, Park, Donghyun, Saadaoui, Jamel, Uddin, Gazi Salah
- DOI
- http://dx.doi.org/10.22617/WPS240467-2
- Dimensions
- 8.5x11
- ISSN
- 2313-6537(print) 2313-6545(PDF)
- Pages
- 45
- Published in
- Philippines
- SKU
- WPS240467-2
- pages
- 44
Table of Contents
- Abstract 4
- 1. Introduction 5
- 2. Literature Review 7
- 3. Methodology and Data 9
- 3.1. Data 9
- 3.2. Methodology 16
- 4. Empirical Results 16
- 4.1. Panel Local Projection Regressions 16
- 4.2. Interactions with Institutional Variables 18
- 4.3. Interactions with Financial Institution and Financial Conditions 19
- 4.4. Quantile Local Projections 23
- 5. Conclusion 26
- Appendixes 27
- A. Data Sources and Definitions 27
- B. Composition of Samples in Unbalanced Panel Regressions 28
- C. Nonlinearities in Impulse Responses According to Risk of Internal Conflicts 29
- D. Baseline Impulse Response Functions with an Extensive Set of Controls 31
- E. Impulse Response Functions with Financial Market Development Indicator 33
- F. Nonlinearities in Impulse Responses According to Government Stability 35
- G. Nonlinearities in Impulse Responses According to Involvement of Military in Politics 37
- H. Nonlinearities in Impulse Responses According to Risk of Ethnic Tensions 39
- I. Nonlinearities in Impulse Responses According to Risk of Religious Tensions 41
- References 43
- Figures 11
- 1: Heat Plot for Low Vulnerability Score 11
- 2: Heat Plot for High Vulnerability Score 12
- 3: Scatter Plot for Vulnerability Score and Bond Yields 15
- 4: Scatter Plot for Vulnerability Score and Sovereign Ratings 15
- 5: Panel Local Projections for Impact of Vulnerability on Bond Yields 17
- 6: Panel Local Projections for Impact of Vulnerability on Sovereign Ratings 18
- 7: Panel Local Projections for Impact of Vulnerability on Bond Yields (External Conflicts) 20
- 8: Panel Local Projections for Impact of Vulnerability on Sovereign Ratings (External Conflicts) 21
- 9: Panel Local Projections for Impact of Vulnerability on Bond Yields (Financial Institutions) 22
- 10: Panel Local Projections for Impact of Vulnerability on Sovereign Ratings (Financial Institutions) 23
- 11: Panel Local Projections for Impact of Vulnerability on Bond Yields (Quantile 0.75) 25
- 12: Panel Local Projections for Impact of Vulnerability on Bond Yields (Quantile 0.25) 25
- Tables 10
- 1: Descriptive Statistics for Involved Variables 10
- 2: Comparing Fundamentals and Institutional Features for Different Levels of Vulnerability 14
