WiP/BEEG seminar: Hubert Massoni

Title: "Climate Trade Costs"

  • Date: 05 December 2024 from 13:00 to 14:00

  • Event location: Seminar Room - Piazza Scaravilli, 2 + Microsoft Teams Meeting

Abstract

This paper examines the impact of extreme weather events on global supply chains through disruptions to trade infrastructure in a context of climate change. Using high-frequency administrative data covering the quasi-universe of firm-to-firm maritime shipments from the U.S. and Brazil, I study the impact of tropical cyclones on U.S. port operations and firm-level adaptive responses. These events disrupt port activities, prompting firms to temporarily reduce firm-to-firm trade activity, without causing significant relationship terminations. Firms however demonstrate persistent adjustments in route choices, even after ports resume normal operations. To evaluate the general equilibrium implications of these transport-related weather disruptions, I develop a quantitative model of spatial production networks with endogenous trade costs and traffic congestion. Once taken to the data, the model will serve to quantify spatial reallocation of economic activity induced by increasing climate risks to the transportation network, and the effectiveness of port-level infrastructure policy.