Cournot seminar – Carl Grekou (CEPII)

Event details :

We are pleased to welcome to the next session of the BETA Cournot seminar organised with the support of the FSEG on Friday 04/12, at 02:00p.m.:

Carl Grekou (CEPII)

who will present his paper entitled

Are Floating Exchange Rates a Shock Absorber for Climate-Driven Inflation? Evidence from the El Niño–Southern Oscillation

Abstract: This paper investigates how exchange-rate regimes shape inflation stabilization following El Niño-Southern Oscillation (ENSO) episodes. Using monthly data for 164 countries over 2000-2019 and panel local projections, we estimate phase-specific inflation responses to ENSO conditions. The responses are markedly asymmetric: El Niño generates persistent inflationary pressure, while La Niña produces a larger and more persistent disinflation. They are also systematically regime-dependent—countries with less flexible regimes display larger and more persistent responses than floaters, even after controlling for monetary-policy frameworks. Tracing the transmission from global commodity prices to country-specific terms of trade and the nominal effective exchange rate, we find that external relative-price movements are broadly similar across regimes, but nominal adjustment differs sharply: floating regimes absorb more of the shock through the exchange rate. ENSO thus offers a recurring external disturbance for studying inflation stabilization under different nominal anchors, and implies that exchange-rate flexibility buffers climate-related inflationary pressures.

If you would like to meet Carl Grekou, please contact Corentin Roussel.