Weathering the Storm
利用澳大利亚气候指数数据，通过向量自回归模型分析极端天气对通胀、利率和失业等金融指标的冲击，揭示其影响机制。
<h3>Abstract</h3> This study examines the financial consequences of extreme weather using data from the Australian Actuaries Climate Index (AACI), which tracks temperature, rainfall, drought, wind, and sea level. Employing both a simple average of AACI components and Principal Component Analysis (PCA), we use a vector autoregression (VAR) model to identify financial market disruptions, including inflationary pressures from food and energy prices, declines in interest rates, and rising unemployment. Energy consumption spikes highlight asset allocation challenges, while Core CPI experiences significant volatility. These findings emphasize the role of extreme weather shocks in shaping inflation dynamics and broader financial stability.