Lucie Giorgi : lucie.giorgi[at]univ-amu.fr
Ricardo Guzman : ricardo.guzman[at]univ-amu.fr
Natalia Labrador : natalia.labrador-bernate[at]univ-amu.fr
Nathan Vieira : nathan.vieira[at]univ-amu.fr
This paper studies the impact of weather variations on agricultural production, and how they may affect agricultural prices and price stability in a developing country. Using monthly data on agricultural production in Peru and daily weather data, we estimate the potential impact of adverse weather events to evaluate their effects on agricultural outcomes on a monthly basis. We further estimate the potential impact of these risks on national inflation. A dynamic and stochastic general equilibrium model, emphasizing the effects of weather events on agricultural producers, complements this analysis to investigate the transmission channels. Preliminary results show non-linear responses of the agricultural prices to weather shocks, depending on the crop and the timing of the shock. The results suggest that negative shocks occurring during the growing season lead to higher prices, which may contribute to temporary national inflationary pressures.