Scholarlink

<p>This paper examines the dynamic impact of climate anomalies on consumer prices within two Sub-Saharan African (SSA) currency unions: the West African Monetary Union (WAMU) and the Central African Monetary Union (CAMU). Using Jordá’s (2005) local projections method on a monthly panel dataset covering 2002M1–2019M12, we estimate the impulse responses of headline and food CPI inflation to temperature, precipitation, and aridity anomalies. At the currency-union level, a sustained <InlineEquation ID="IEq1"> <EquationSource Format="TEX">\(1^{\circ}\)</EquationSource> </InlineEquation>C increase in temperature anomalies raises headline inflation by up to 0.4 percentage point in WAMU and up to 1 percentage point in CAMU within the first year following the shock. By contrast, a 10 mm decrease in precipitation anomalies produces smaller and less systematic effects, peaking at around 0.1 percentage point in WAMU and 0.04 percentage point in CAMU. When using a composite aridity anomaly index capturing compounded hydro-climatic stress, we find persistent inflationary responses of about 0.4 percentage point in both unions. Disaggregated results show that food inflation responds more strongly than headline inflation, with peak increases of 1 percentage point in WAMU and 1.4 percentage points in CAMU following temperature shocks. Country-level estimations reveal substantial heterogeneity: semi-arid and agriculture-dependent economies experience larger and more persistent effects, while higher income levels, higher energy consumption, and stronger political stability dampen transmission. These findings, robust across alternative specifications and estimation methods, underscore the importance of systematically integrating climate risks into macroeconomic and monetary policy frameworks, particularly in climate-vulnerable fixed exchange-rate regimes.</p>

错误：搜索内容不能为空，请输入英文关键词
错误：关键词超出字数限制，请精简
高级检索

Climate anomalies and price dynamics: insights from Sub-Saharan African currency unions

  • 期刊论文

  • 发表日期：

    2026年6月25日

查看全文
  • Xavier Emmanuel Wend Kuni Compaore,
  • Hamza Bennani,
  • Camille Aït-Youcef

摘要

This paper examines the dynamic impact of climate anomalies on consumer prices within two Sub-Saharan African (SSA) currency unions: the West African Monetary Union (WAMU) and the Central African Monetary Union (CAMU). Using Jordá’s (2005) local projections method on a monthly panel dataset covering 2002M1–2019M12, we estimate the impulse responses of headline and food CPI inflation to temperature, precipitation, and aridity anomalies. At the currency-union level, a sustained \(1^{\circ}\) C increase in temperature anomalies raises headline inflation by up to 0.4 percentage point in WAMU and up to 1 percentage point in CAMU within the first year following the shock. By contrast, a 10 mm decrease in precipitation anomalies produces smaller and less systematic effects, peaking at around 0.1 percentage point in WAMU and 0.04 percentage point in CAMU. When using a composite aridity anomaly index capturing compounded hydro-climatic stress, we find persistent inflationary responses of about 0.4 percentage point in both unions. Disaggregated results show that food inflation responds more strongly than headline inflation, with peak increases of 1 percentage point in WAMU and 1.4 percentage points in CAMU following temperature shocks. Country-level estimations reveal substantial heterogeneity: semi-arid and agriculture-dependent economies experience larger and more persistent effects, while higher income levels, higher energy consumption, and stronger political stability dampen transmission. These findings, robust across alternative specifications and estimation methods, underscore the importance of systematically integrating climate risks into macroeconomic and monetary policy frameworks, particularly in climate-vulnerable fixed exchange-rate regimes.