Laurent Ferrara

Interdisciplinary seminars
French-Japanese webinar

Laurent Ferrara

Skema Business School
Dynamic effects of weather shocks on production in European economies
Joint with
Daniele Columbo
Friday, April 12 2024| 10:00am to 11:00am

Gilles Dufrénot: gilles.dufrenot[at]
Kiyotaka Sato: sato[at]


This paper evaluates the dynamic impact of weather shocks on economic activity within the three main European countries. To consolidate meaningful variation in weather patterns, we propose a novel monthly composite weather index (CWI). This index captures relevant information on severe cold and heat conditions, drought, heavy precipitation, and intense wind events. We estimate a series of country-specific Bayesian Structural Vector Autoregressive models to assess the effects of weather shocks on distinct production sectors, namely energy, construction, manufacturing, and services. The findings reveal evidence of a significant impact of weather shocks on economic activity in Europe, with each component of the CWI exerting heterogeneous effects across.