What question did this study set out to answer?

This research aims to determine how extreme climate events influence inflation in OECD countries.

February 8, 2026Open Access

The impact of climate change on inflation in OECD countries

Key Points

This research aims to determine how extreme climate events influence inflation in OECD countries.
Analyzed time series data of economic and climate variables.
Employed a regression model to assess the relationship between climate phenomena and inflation.
Focused on specific climate events like heatwaves and droughts.
Certain sectors showed sensitivity to climate conditions, influencing inflation to some extent.
Overall impact of climate factors on inflation remained limited.
Monetary variables, particularly money supply and interest rates, significantly affected inflation.

Abstract

This study explores the impact of extreme climate events on price dynamics in OECD countries. Relying on time series data of economic and climate variables, it uses a regression model to analyze the effect of phenomena such as heatwaves and droughts on inflation. The results show that although certain sectors are sensitive to climate conditions (temperature, precipitation), their influence on overall inflation remains limited. In contrast, monetary variables, particularly money supply and interest rates, play a decisive role. The study thus highlights the predominant role of monetary policy in regulating inflation.

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