Every country in the world has been affected by climate change. Global warming is considered a structural handicap for developed economies as well as developing economies. All the scientists have agreed that global warming can lower the pace of their growth and it can disrupt its financial stability. For some countries, this phenomenon can even worsen their financial instabilities. For these reasons, scientific research has been directed towards very advanced empirical studies linking the climate cycle with the economic cycle and these have been noticed by the development of the Integrated Assessment Models (IAM). This kind of model is considered as a macroeconomic model of climate change but in our case, we introduce this module in the Dynamic Stochastic General Equilibrium Model applied for the Tunisian economy. Our paper develops an environmental DSGE (E-DSGE) model whose objective is to try to sensitize political decision-makers as well as Tunisian financial decision-makers, to be more concerned about climate change in their economic policies from an evaluation of the effects of these climatic changes on financial stability in Tunisia. This study finds the negative effect of temperature on the whole of macroeconomic variables which led to the persistence of financial instability in Tunisia.
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CITATION STYLE
Salem, H. H., Mansour, N., & Salem, S. B. (2023). Climate Risks in Tunisia. In Lecture Notes in Networks and Systems (Vol. 487, pp. 763–782). Springer Science and Business Media Deutschland GmbH. https://doi.org/10.1007/978-3-031-08084-5_55