TY - BOOK ID - 133986155 TI - Sectoral Impact and Propagation of Weather Shocks PY - 2023 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Macroeconomics KW - Economics: General KW - Macroeconomics: Production KW - Business Fluctuations KW - Cycles KW - Transactional Relationships KW - Contracts and Reputation KW - Networks KW - Macroeconomic Analyses of Economic Development KW - Climate KW - Natural Disasters and Their Management KW - Global Warming KW - Economic & financial crises & disasters KW - Economics of specific sectors KW - Currency crises KW - Informal sector KW - Economics UR - https://www.unicat.be/uniCat?func=search&query=sysid:133986155 AB - Local weather shocks have been shown to affect local economic output, however, little is known about their propagation through production networks. Using a six-sector global dataset over the past fifty years, this paper examines the effect of weather fluctuations and extreme weather events on sectoral economic production and the transmission of weather shocks across sectors, countries and over time. I document that agriculture is the most harmed sector by heat shocks, droughts and cyclones. Using input-output interlinkages, I find that sectors at later stages of the supply chain suffer from substantial and persistent losses over time due to domestic and foreign heat shocks in other sectors. A counterfactual analysis of the average annual output loss accounting for heat shocks across trade partners shows a substantial underestimation of the economic cost of temperature increases since 2000. ER -