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Natural Disasters, Climate Change, and Sovereign Risk

Author

Abstract
Unexpected shocks may tip countries with elevated fiscal vulnerabilities into default. The literature has emphasized the role of macroeconomic and financial shocks, such as a decline of commodity prices (Reinhart et al., 2016) or banking crises (Baltenau and Erce, 2018) in shaping sovereign risk.

Suggested Citation

  • Enrico Mallucci, 2020. "Natural Disasters, Climate Change, and Sovereign Risk," FEDS Notes 2020-12-18-1, Board of Governors of the Federal Reserve System (U.S.).
  • Handle: RePEc:fip:fedgfn:2020-12-18-1
    DOI: 10.17016/2380-7172.2813
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    File URL: https://www.federalreserve.gov//econres/notes/feds-notes/natural-disasters-climate-change-and-sovereign-risk-20201218.htm
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    Cited by:

    1. Nguyen, Dat Thanh & Tran, Vuong Thao & Phan, Dinh Hoang Bach, 2023. "Does green activity impact stock price crash risk? The role of climate risk," Finance Research Letters, Elsevier, vol. 55(PA).
    2. Boitan, Iustina Alina & Marchewka-Bartkowiak, Kamilla, 2022. "Climate change and the pricing of sovereign debt: Insights from European markets," Research in International Business and Finance, Elsevier, vol. 62(C).
    3. Di Tommaso, Caterina & Foglia, Matteo & Pacelli, Vincenzo, 2023. "The impact and the contagion effect of natural disasters on sovereign credit risk. An empirical investigation," International Review of Financial Analysis, Elsevier, vol. 87(C).
    4. Juan Carlos Hatchondo & Mr. Leonardo Martinez & Cesar Sosa Padilla, 2020. "Sovereign Debt Standstills," IMF Working Papers 2020/290, International Monetary Fund.
    5. Toan Phan & Felipe Schwartzman, 2023. "Climate Defaults and Financial Adaptation," Working Paper 23-06, Federal Reserve Bank of Richmond.
    6. Gregory, Richard P., 2021. "Climate disasters, carbon dioxide, and financial fundamentals," The Quarterly Review of Economics and Finance, Elsevier, vol. 79(C), pages 45-58.

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    More about this item

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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