Climatic Oscillations and Sovereign Debt Crises

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Richard Paul Gregory

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Department of Economics and Finance
School of Business and Technology
East Tennessee State University
227 Sam Wilson Hall
PO Box 70686
Johnson City, TN 37614

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gregoryr@etsu.edu
423.849.3349

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Keywords: Climate Risk; Sovereign Debt; Financial Crisis; Climatic Oscillation; El Nino
This research did not receive any specific grant from funding agencies in the public,
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commercial, or not-for-profit sectors.
'Declarations of interest: none'.
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This preprint research paper has not been peer reviewed. Electronic copy available at: https://ssrn.com/abstract=4392352
 Climatic Oscillations and Sovereign Debt Crises

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Abstract
I present the case for the relationship between climatic oscillations and sovereign debt
crisis between 1970 to 2018. I find strong empirical evidence of a relationship between the

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Antarctic Oscillation, the Madden-Julian Oscillation, the North Atlantic Oscillation, the
Pacific North American Pattern, and the Pacific Decadal Oscillation and the incidence of
Sovereign Debt Crises. Additionally, the combination of the El Nino Oscillation with the
Indian Dipole, the North Atlantic Oscillation and the Pacific North American Pattern are
associated with droughts that contributed to Sovereign Debt Crises.

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This preprint research paper has not been peer reviewed. Electronic copy available at: https://ssrn.com/abstract=4392352
 1 Climatic Oscillations and Sovereign Debt Crises

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6 Keywords: Climate Risk; Sovereign Debt; Financial Crisis; Climatic Oscillation; El Nino
7 This research did not receive any specific grant from funding agencies in the public,
8 commercial, or not-for-profit sectors.

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9 'Declarations of interest: none'.
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This preprint research paper has not been peer reviewed. Electronic copy available at: https://ssrn.com/abstract=4392352
 30 Climatic Oscillations and Sovereign Debt Crises

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31 Abstract
32 I present the case for the relationship between climatic oscillations and sovereign debt
33 crises between 1970 to 2018. I find strong empirical evidence of a relationship between the

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34 Antarctic Oscillation, the Madden-Julian Oscillation, the North Atlantic Oscillation, the
35 Pacific North American Pattern, and the Pacific Decadal Oscillation and the incidence of
36 Sovereign Debt Crises. Additionally, the combination of the El Nino Oscillation with the
37 Indian Dipole, the North Atlantic Oscillation, and the Pacific North American Pattern are
38 associated with droughts that contributed to Sovereign Debt Crises.

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This preprint research paper has not been peer reviewed. Electronic copy available at: https://ssrn.com/abstract=4392352
 60 1. Introduction

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62 The government of Venezuela announced in November of 2017 that it would be restructuring

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63 its debt, leading to a sovereign debt crisis, and then proceeded to default on a series of debt

64 payments. The Maduro government owed $64.3 Billion in external debt, between $20 to $30

65 Billion in bi-lateral debt, $5 Billion in multi-lateral debt, $30 Billion in arrears, and contingent

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66 liabilities, and VEF 853 Billion in domestic liabilities (Molina and Papaioannou (2018)). The

67 reasons given for the restructuring were many. Many commentators blamed the economic

68 policies of the Maduro government for unsustainable spending policies that were too reliant on

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69 the price of oil (McCarthy (2017), Economist (2017)). Supporters of the Maduro regime blamed

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the financial sanctions placed by the Trump presidency in August 2017 (Nelson (2019)).
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71 Little mentioned in the press was the fact that Venezuela had been suffering over three years

72 of drought in the country (Dutka (2016)). During the drought, rainfall measured 65% lower than

73 normal. The rainfall deficit was a factor in the economy’s inflation due to food production
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74 shortfalls and falls in production due to less hydroelectric power production at the Guri dam

75 which provides 70% of the country’s electricity needs. There was a 60% decline in the
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76 production of rice corn and coffee and the size of the domestic beef herd dropped from 13

77 million to 8 million (Barrett (2019)). The lack of electricity left factories and refineries idle,
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78 hurting exports, leaving even fewer means to earn foreign currency to pay off debts (Kurmanaev

79 and Otis (2016)).

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80 What caused the severe drought in Venezuela? Erfanian et al (2017) examine the evidence

81 and conclude that it was primarily due to the El Nino Oscillation. Shimizu et al (2016) on the
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 82 other hand point out that it could have been due to a combination of the El Nino Oscillation and

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83 the Madden-Julian Oscillation.

84 Using the updated Systemic Banking Crisis Database of Laeven and Valecia (2020). I

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85 examine the usefulness of climate oscillations in predicting the incidents of Sovereign Debt

86 Crises. I find that several climatic oscillations, alone or in combination, are significant predictors

87 of the incident of Sovereign Debt Crises. I then explore specific crises and the climatology

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88 literature and climate incidents to see if there is a chain of causation between climate change,

89 climate oscillations, droughts, and Sovereign Debt Crises. Altogether, I can show that climatic

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90 oscillations through droughts contributed to 47 out of 71 Sovereign Debt Crises from 1970

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through 2018 or 66%. This is a sizable percentage. The policy implications are that exogenous

shocks due to climate change have been adding to the debt burdens of countries making it more
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93 difficult for them to pay on their debts. This calls for a reformulation of debt repackaging and

94 policy recommendations.
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95 The causes of Sovereign Debt Crises are many. Taylor (2011) reports that global financial

96 crises often take place in an environment of low-interest rates. Ullah (2014) points out that trade
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97 imbalances and credit booms are responsible for Sovereign Debt Crises. Roch and Uhlig (2018)

98 blame a trio of negative income shocks, government impatience, and “sunspot-coordinated”

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99 buyer strike as the reasons for Sovereign Debt Crises.

100 The theoretical motivation of climatic oscillations on sovereign debt crises is relatively
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101 straightforward. Climatic oscillations lead to exogenous shocks to the economy via droughts,

102 floods, high temperatures, etc. that curtail production in agriculture, transportation, and industry.

This in turn cuts back on revenues earned by the government through taxes and tariffs, leading to
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104 a lack of ability to pay on debt and thus contributing to a sovereign debt crisis. There is a large

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105 literature on the detrimental effects of high temperatures that accompany droughts on the

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106 economy (Dell, Jones and Olken (2009), Dell, Jones and Olken (2012), Balvers et al (2017), and

107 Gregory (2021) for example).

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108 2. Literature Review

109 The thesis that climatic oscillations might affect economic conditions has a long, but small

research output. Handler and Handler (1983) examine the relationship between El Nino events

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111 and corn yields in the United States and find that warner surface temperature in the Pacific is

112 associated with higher crop yields. Salafsky (1994) examines the idea in conjunction with El

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113 Nino Oscillations affecting the rural economy in West Kalimantan Indonesia. He found that El

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115 income.
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Nino linked dry-periods resulted in a loss of between one-quarter to one-half of the township’s
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116 Adams et al (1995) show that there is substantial value to the agricultural industry from being

117 able to forecast El Nino events, as do Solow et al (1998).

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118 Changnon (1999) assessed the benefits and costs of the 1997-98 El Nino Oscillation in the

119 United States and estimated the benefits at $19 Billion and the costs at $4 Billion.
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120 Harris and Robinson (2001) study the economy-wide effect of the El Nino Oscillation on
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121 Mexico. They find that the aggregate value of agricultural losses to El Nino events is about 3%

122 of the total agricultural value and that the economy is quite robust in the face of such shocks.

123 However, the El Nino effects on Mexico during the era investigated were relatively mild.
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124 Brunner (2002) examines the historical effects of El Nino on world prices and economic

125 activity. He finds that a one-standard-deviation positive surprise in the El Nino Oscillation raises
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126 real commodity price inflation about 3.5 to 4 percentage points and that the El Nino Oscillation

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127 explains some of the world consumer price inflation and world economic activity, accounting for

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128 approximately 10% to 20% of their variability.

129 Laosuthi and Selover (2007) investigate the effect of the El Nino Oscillation on business

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130 cycles and find much weaker effects than Brunner. They find that El Nino only affects South

131 Africa, Australia, India, and Malaysia. They argue that this is due to the beneficial effects of El

132 Nino canceling out the dire effects.

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133 Ubilava (2012) investigates the impact of El Nino events on coffee prices and finds that El

134 Nino events depress coffee prices significantly up to one year. Iizumi et al (2014) examine the

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135 effects of the El Nino Oscillation on four crop yields in multiple countries. They find that during

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137 to 0.0%.
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low El Nino years that the global-mean yields of all four crops tend to be below normal by −4.5
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138 Cashin et al (2017) employ a dynamic multi-country framework to analyze the transmission

139 of El Nino related shocks between economies. They find that while some economies experience
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140 short-lived inflationary pressures due to El Nino events, such as Australia and India, others, such

141 as the United States see enhanced growth due to El Nino events.
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142 Of course, there is the large climate-economy literature that has rapidly grown around using

143 panel data methods with temperature, precipitation, and storm events to explain economic
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144 outcomes. Dell, Jones, and Olken (2009) show in the year 2000 that countries that are on average

145 8.5% poorer per-capita per 1°C warmer. Dell, Jones, and Olken (2012) study annual variation in
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146 temperature and precipitation effects on per-capita income. They show that a 1°C increase in

147 temperature in a given year reduces per-capita income by 1.4%. Hsiang (2010) finds output falls
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148 2.5 percent per 1°C warming. Balvers et al (2017) find that US temperature shocks cause a

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149 0.22% loss to US output, While Gregory (2021) finds a 2.8% loss to US output due to US and

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150 Worldwide temperature shocks.

151 Barrios (2010) estimate that worsening rainfall conditions in Africa since the 1960s can

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152 explain 15-40% of the per-capita income gap between Sub-Saharan Africa and the rest of the

153 developing world by the year 2000. Miguel, Satyanath, and Sergenti (2004), seeking to explain

154 civil conflict, study 41 African countries from 1981-1999 and show that annual per-capita

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155 income growth is positively predicted by current and lagged rainfall growth. They also find that

156 civil conflict is negatively affected by rainfall growth. Bruckner and Ciccone (2011) also find

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157 that negative rainfall shocks lower income. Burke and Leigh (2010) find that temperature is a

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strong predictor of income.
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So far in the Economics literature, the attention has been focused on the El Nino Oscillation.
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160 However, there are other oscillations that alone or in conjunction with the El Nino Oscillation

161 can produce extreme weather events. The Antarctic Oscillation (AAO) is defined as the
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162 difference of zonal mean sea level pressure between 40⁰S and 65⁰S. Silvestri and Vera (2003)

163 show that it is associated with precipitation anomalies over South America. Reason and Roualt
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164 (2005) tie it with rainfall events over Southern Africa. It also affects the East Asian climate (Fan

165 and Wang (2006)). Climate models show increasing trends for the AAO with Global warming
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166 (Fyfe et al (1999), Cai et al (2003)).

167 The Arctic Oscillation (AO) has a dominating influence over the weather in Eurasia, North
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168 America, and the Middle East, influencing temperature, precipitation, and storm events (He et al

169 (2017) and Park et al (2011)). Again, climate models show increasing trends for the AO with

Global warming (Fyfe et al (1999), Cai et al (2003)).

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170

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171 The Atlantic Multidecadal Oscillation (AMO) is a hemispheric scale of observed climate

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172 variability with alternating phases over large parts of the Northern Hemisphere. It has been

173 related to North-Eastern Brazilian and African Sahel rainfall, Atlantic hurricanes, and North

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174 American and European summer climate (Knight et al (2006)). Terray (2012) suggests that

175 global warming is the main driver in increased activity in the AMO.

176 The El Nino Oscillation (ENSO) has already been discussed. It has been linked with weather

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177 events in Europe (Bronniman (2007)), South America (Cai et al (2020)), North America

178 (Ropelewski, and Halpert (1986)), Asia (Chongjin, (1990)), Africa (Stige et al (2006), and

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179 Australia (Tularam (2010)). Under climate models with global warming, El Nino events are

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projected to increase (Yeh et al (2009)). El Nino has also been linked with weather events in

conjunction with other oscillations such as the AMO (Yu et al (2015)).

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182 The Indian Dipole Oscillation (IDO) has been linked to monsoon activity in Asia by

183 Chongyin and Mingquan (2000). In conjunction with ENSO, it has been linked with Southern
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184 African precipitation (Hoell et al (2017)). Banu et al (2015) link IDO incidents with outbreaks of

185 Dengue Fever. Cai et al (2009) find evidence that global warming is increasing IDO events.
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186 The Madden-Julian Oscillation (MJO) affects many weather and climate phenomena, often in

187 conjunction with other oscillations (Zhang (2013)). Wheeler and McBride (2012) find that the
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188 MJO plays a large role in Australian monsoons. The MJO also plays a big role in Pacific

189 typhoons in conjunction with the ENSO (Hall et al (2001), Ho et al (2006)). Maloney et al
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190 (2019) find that the MJO intensifies under climate change.

191 The North Atlantic Oscillation (NAO) is a prominent recurring pattern that dictates climate
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192 variability throughout the Northern Hemisphere (Hurrell et al (2003)). Severe drought has been

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193 tied to NAO variability (Cullen and deMenocal (2000)). Gillett et al (2003) find that climate

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194 change is partially responsible for an upward trend in the NAO.

195 The North Pacific Oscillation (NPO), is a north-south variability in sea level pressure over

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196 the North Pacific on monthly (and shorter) time scales, that was identified by Sir Gilbert Walker

197 in 1924 (Walker (1924)). It has been linked to North American winter extremes (Baxter and

198 Nigram (2015)), Pacific climate variability (Furtado et al (2012)), Pacific typhoon activity (Chen

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199 et al (2015)), and East Asian winter climate (Wang et al (2007)). There is no evidence that

200 climate change affects the North Pacific Oscillation (Furtado et al (2011)).

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201 The Northern Pacific Gyre Oscillation (NPGO) is a climate pattern that emerges as the

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203
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second dominant mode of sea surface height variability in the Northeast Pacific (Di Lorenzo et al

(2008)). The NPGO is found to be linked to summer precipitation in East Asia (Ye et al (2016)),
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204 stratospheric warming in the Northern Hemisphere (Hu et al (2017)) and increasingly influencing

205 Pacific weather (Di Lorenzo et al (2010)). Model simulations indicate that the NPGO will play
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206 an increasing role in weather phenomena with climate change (Di Lorenzo et al (2008)).

207 The Pacific Decadal Oscillation (PDO) has been described as a long-lived El Nino -like
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208 Pacific climate variability (Mantua and Hare (2001)). Warm periods in the PDO coincide with

209 dry periods in eastern Australia, Korea, Japan, the Russian Far East, Alaska, The United States,
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210 Central America, and South America (Mantua and Hare (2001)). The PDO has also been linked

211 to Indian monsoon rainfall (Krishnan and Sugi (2003)). Li et al (2020) find that the PDO
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212 becomes more unpredictable under climate change. Zhang and Delworth (2016) find in

213 simulations that the PDO also becomes more variable under climate change.
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214 The Pacific North American Pattern (PNAP) is recognized as a major mode of low-frequency

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215 variability over the Northern Hemisphere (Rodionov and Assel (2001)). The PNAP is strongly

216 correlated with monthly temperatures in many US climatic divisions. Leathers et al (1991)

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217 demonstrate that the PNAP is highly correlated with North American temperature and

218 precipitation. There is no research on the effects of climate change on the PNAP.

219 3. Data and Methodology

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220 The oscillations selected for this study, the Antarctic Oscillation (AAO), the Arctic

221 Oscillation (AO), the Atlantic Multidecadal Oscillation (AMO), the El Nino Oscillation (ENSO),

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222 the Indian Dipole Oscillation (IDO), the Madden-Julian Oscillation (MJO) in three phases, the

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North Atlantic Oscillation (NAO), the North Pacific Oscillation (NPO), the Northern Pacific

Gyre Oscillation (NPGO), the Pacific Decadal Oscillation (PDO) and the Pacific North
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225 American Pattern (PNAP) were chosen due to their inclusion on the webpage “El Nino and other

226 Oscillations” at https://www.whoi.edu/know-your-ocean/ocean-topics/ocean-circulation/el-nio-

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227 other-oscillations/ maintained by the Woods Hole Institute.

228 For each oscillation index data was obtained and annualized by the average method. Indices
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229 for the AAO, AO, ENSO, NAO, and the three phases of the MJO (MJO1, MJO2, MJO3) come

230 from US National Weather Service Climate Prediction Center:

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231 https://www.cpc.ncep.noaa.gov/products/precip/CWlink/daily_ao_index/teleconnections.shtml.

232 The AMO, NPO, PDO, NPGO, and PNAP indices come from National Center for Atmospheric
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233 Research at: https://climatedataguide.ucar.edu/climate-data/

234 To control for economic forces that contribute to Sovereign Debt Crises, I use standard
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235 economic variables from the FRED database at the St. Louis Federal Reserve:

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236 https://fred.stlouisfed.org/. These variables are: CRF the change in the annual 90-day US

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237 Treasury Bill rate. DEF the annual difference between the Moodys AAA and BAA rates. TERM

238 the annual difference between the US Ten-year Treasury Note and the (0-day Treasury Bill. WTI

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239 the annualized price of West Texas Intermediate Crude Oil. Optimally, a more international price

240 of oil would be used, but the WTI was the only price of oil available that covered the 1970s.

241 Table 1 gives the descriptive statistics of the variables used in the study.

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242 Table 1
243 Descriptive Statistics
244 This table reports descriptive statistics for the variables used in the following regressions estimated in the paper. AAO, AO, AMO, ENSO, IDO,

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245 MJO1, MJO2, MJO3, NAO, NPGO, PDO, and PNAP are climatic oscillation indices described in the test. CRF is the change in the annual 90-
246 day US Treasury Bill rate. DEF is the annual difference between the Moodys AAA and BAA rates. TERM is the annual difference between the
247 US Ten-year Treasury Note and the (0-day Treasury Bill. WTI is the annualized price of West Texas Intermediate Crude Oil. All data is over the
248 sample period 1970 to 2018, except AAO and MJO1, MJO2 and MJO3, which are 1979 to 2018 because of availability. The Sovereign Debt
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Mean 0.073300 -0.009573

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Crisis Indicator shows the number of sovereign debt crises per year. The Jarque-Bera statistic tests for normality with a null hypothesis that the
variable is drawn from a normal distribution. *, ** , and *** signify significance at the 10%, 5% and 1% level respectively.
Variable AAO AO AMO
-0.054811
ENSO
-0.021854
IDO
0.011844
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Std. Dev 0.442497 0.389354 0.195060 0.635451 0.224569
Skewness -0.148534 0.265010 0.064279 0.255528 0.273761
Kurtosis 2.259927 3.757755 2.232041 2.508411 2.598146
Jarque-Bera 1.059928 1.745857 1.237840 1.026629 0.941755
Observations 40 49 49 49 49
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Variable MJO1 MJO2 MJO3 NAO NPGO

Mean 0.003160 0.004091 1.196315 0.076750 0.114345
Std. Dev 0.039956 0.042856 0.159395 0.379062 1.037473
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Skewness 0.244344 -0.207951 -0.141964 -0.276219 0.037340

Kurtosis 2.496998 2.550543 2.096710 4.290018 2.117252
Jarque-Bera 0.819714 0.624976 1.494248 4.020723 1.602343
Observations 40 40 40 49 49
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Variable PDO PNAP CRF DEF TERM
Mean -0.247211 0.082279 -0.096480 1.086361 1.711599
Std. Dev 0.869623 0.372341 1.482955 0.391403 1.096726
Skewness -0.019005 0.138804 -0.095897 1.220033 -0.395628
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Kurtosis 2.080691 2.555279 2.629954 4.056614 2.088356

Jarque-Bera 1.728422 0.561138 0.354676 14.43531*** 2.975078
Observations 49 49 49 49 49
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 Variable WTI Sovereign NPO

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Debt Crisis
Indicator
Mean 35.52631 1.448980 1012.465
Std. Dev 27.44996 2.092260 0.993438
Skewness 1.088780 2.161564 0.110939

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Kurtosis 3.082235 7.927117 2.086128
Jarque-Bera 9.694909*** 87.72208*** 1.805633
Observations 49 49 49
254

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255 As can be seen, the null hypothesis of a normal distribution cannot be rejected for any of the

256 oscillation indices. However, the Sovereign Debt Crisis Indicator, which is censored at zero, is

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257 highly non-normal, with a highly skewed and kurtopic distribution.

258

259 following latent variable regression model is estimated:

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Given the nature of the dependent variable, the Sovereign Debt Crisis Indicator, the
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260 𝑦∗𝑡 = 𝑥𝑖,𝑡𝛽𝑖,𝑡 +𝜎𝜖𝑡 (1)

261 Where 𝑦∗𝑡 is the Sovereign Debt Crisis Indicator, 𝑥𝑖,𝑡 is a set of predictor variables including an
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262 oscillation index and the four economic variables, 𝜖𝑡 is an error term, 𝜎 is a scale parameter that

will be estimated along with the coefficients 𝛽𝑖,𝑡.

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264 In the tobit model , the observed data are given by:
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265 𝑦𝑡 = { 0 𝑖𝑓𝑦∗𝑡 ≤ 0
𝑦∗𝑡 𝑖𝑓 𝑦∗𝑡 > 0
} (2)

266 Given the statistical results for the dependent variable, the error term is modeled as coming from
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267 an extreme value distribution. The regressions on the oscillations are run separately on each

268 oscillation index due to multicollinearity issues.

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269 4. Results

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270 There were twelve Tobit regressions to run. To save space only the results for the six

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271 regressions found significant results for oscillations. Six out of twelve results at a ten percent

272 significance have a 0.005% probability of being due to chance according to the binomial

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273 distribution. According to the Bonferroni method, at a cutoff point of 10% with 12 trials, we

274 would need a result of less than 0.0083 to have significant results. The best result, The Pacific

275 Decadal Oscillation Index, has a measured significance of 0.0073!.

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276 The first significant result is for the AAO index. This is shown in Table 2.

277 Table 2

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278 Censored Extreme Value Regression AAO on Sovereign Debt Crisis Indicator
279 This table shows the Tobit regressions results from regressing the Sovereign Debt Crisis Indicator on the variables in the table. AAO is the
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283
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Antarctic Oscillation Index. CRF is the change in the annual 90-day US Treasury Bill rate. DEF is the annual difference between the Moodys
AAA and BAA rates. TERM is the annual difference between the US Ten-year Treasury Note and the (0-day Treasury Bill. WTI is the
annualized price of West Texas Intermediate Crude Oil. All data is over the sample period 1979 to 2018. *, ** , and *** signify significance at
the 10%, 5% and 1% level respectively. Standard errors are in parentheses.
Variable/Statistic Coefficient/Value
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Constant -2.145011**
(1.063128)
AAOt-1 1.180404*
(0.685991)
CRFt-1 -0.433589*
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(0.225752)
DEFt-1 5.102015***
(0.898000)
TERMt-1 -0.109112
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(0.193177)
WTIt-1 -0.021765**
(0.010331)
Scale 1.604883***
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(0.217001)
Akaike info criterion 4.299102
Log likelihood -76.83248
284
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285 The Antarctic Oscillation Index is positive and significant at the 10% level of significance,

286 indicating that when the index is higher, there is a greater likelihood of sovereign debt crises.
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287 The DEF variable is positive and significant as would be expected as risk of default is higher.

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288 The WTI is negative and significant, as would be expected if countries with oil reserves would

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289 be able to use them to pay off debts.

290 Reason and Roualt (2005) find that South American droughts are more likely to occur

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291 when the AAO is higher, as do Silvestri and Vera (2003). There were 12 Sovereign Debt Crises

292 in South America between 1970-2018. Of the three involving Argentina, two were accompanied

293 or preceded by severe and extreme droughts (Rivera et al (2021) in 2005 and 2014. In 1980,

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294 Bolivian rainfall was severely sub-par (Seiler et al (2013)) during its debt crisis. In 1994, the

295 AAO was higher, the Brazilian drought raised prices of Orange Juice and Coffee and

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296 accompanied the Debt crisis there (Associated Press (1994)). The 1999 Ecuador Sovereign Debt

297

298
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crisis was in part blamed on an El Nino led drought Amelio (2019), however, it could be in part

due to the AAO which was high at the time. The 2009 Ecuadorian Sovereign Debt Crisis took
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299 place during a historical drought (CCTV 2009). It was also a time when the AAO was coming

300 off a high. Alarcon (2009) demonstrates that the Peruvian Debt Crisis of 1996 was preceded by a

301 severe drought. So, seven of the twelve debt crises were associated with droughts that could have
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302 been in part caused by the AAO.

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303 Reason and Roualt (2005) tie the AAO with rainfall events over Southern Africa. In

304 Southern Africa between 1970-2018, there were 10 Sovereign Debt Crises. When the AAO is
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305 down, Southern African rainfall is less. The 1992 Angolan Debt Crisis came after then of

306 sixteen-year civil war and during one of Africa’s worst droughts (Uganai (1994)) when the AAO

307 fell. The AAO was also down in 1981 during one of Madagascar's worst droughts and the famine
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308 that went along with its debt default of 1981 (ChinaDaily (2021)).

The Mozambique Debt crisis of 1984 was accompanied by famine and drought (Kamm
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309

310 (1984)) and a plunging AAO index. In 1985, there was a very severe drought in South Africa,

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311 along with a Sovereign Debt default (Williams (2021)). The Tanzania Debt Crisis was

ed
312 accompanied by a drought that led to a shortfall in food production (Shao (1985)). There was

313 also a deepening AAO index. And of course, the 1981 Ugandan Debt default was accompanied

iew
314 by drought and famine and a falling AAO index (Jaynes (1981)). So, there is a connection

315 between six drought and six debt crises in Southern Africa and the AAO.

316 While there is documented influence of the AAO on East Asian Climate changes (Fan

ev
317 and Wang (2006)), it is not clear that this is linked to droughts or other extreme events that might

318 affect debt crises in the region.

r
AAO
1.00
0.75
er
pe
0.50
0.25
0.00
ot

-0.25
-0.50
tn

-0.75
-1.00
rin

319 70 75 80 85 90 95 00 05 10 15

320 Figure 1 AAO

ep

321 The second significant result is for the third phase of the Madden-Julian Oscillation.

322 Table 3
Pr

323 Censored Extreme Value Regression of MJO3 on Sovereign Debt Crisis Indicator
324 This table shows the Tobit regressions results from regressing the Sovereign Debt Crisis Indicator on the variables in the table. MJO3 is the third
325 Madden-Julian Index. CRF is the change in the annual 90-day US Treasury Bill rate. DEF is the annual difference between the Moodys AAA and

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326 BAA rates. TERM is the annual difference between the US Ten-year Treasury Note and the (0-day Treasury Bill. WTI is the annualized price of
327 West Texas Intermediate Crude Oil. All data is over the sample period 1979 to 2018. *, ** , and *** signify significance at the 10%, 5% and 1%

ed
328 level respectively. Standard errors are in parentheses.
Variable/Statistic Coefficient/Value
Constant 3.714641
(3.045363)
MJO3t-1 -4.694561***

iew
(1.806443)
CRFt-1 0.342708
(0.242515)
DEFt-1 4.798470***
(1.071986)
TERMt-1 0.500382

ev
(0.321981)
WTIt-1 -0.037514***
(0.011548)
Scale 1.704306***

r
(0.204432)
Akaike info criterion 4.447935

329

330
Log likelihood
er -81.95870

The coefficient on the index is negative and significant at the 1% level, indicating that decreases
pe
331 in the index are associated with debt crises. Zhang (2013) provides evidence that the Madden-

332 Julian Oscillation is connected with monsoons, wildfires, floods, and droughts in Asia, Australia,

333 and Europe.

ot
tn
rin
ep
Pr

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 MJ03

ed
1.5

1.4

iew
1.3

1.2

1.1

ev
1.0

0.9

r
0.8
70 75 80 85 90 95 00 05 10 15
334

335
er
There were four Sovereign Debt Crises in Asia over the period 1970-2018. For three of them, the
pe
336 Philippines 1983, Indonesia 1999, and Seychelles 2008, the MJO3 was down. In the Philippines,

337 part of the economic crisis is documented as being due to a prolonged drought that had adverse

338 effects on output (Sicat (1984)). Indonesia, in addition to facing civil unrest, also faced a severe
ot

339 drought in 1999 (FAOUN (1998)). There was nothing reported in the Seychelles other than a

340 minor forest fire.

tn

341 In Europe, over the period there were nine Sovereign Debt crises. None took place when
rin

342 the MJO3 was falling.

343 The third significant index is the NAO. The results are presented in Table 4.
ep

344 Table 4
345 Censored Extreme Value Regression of NAO on Sovereign Debt Crisis Indicator
346 This table shows the Tobit regressions results from regressing the Sovereign Debt Crisis Indicator on the variables in the table. NAO is the North
347 Atlantic Oscillation Index. CRF is the change in the annual 90-day US Treasury Bill rate. DEF is the annual difference between the Moodys
Pr

348 AAA and BAA rates. TERM is the annual difference between the US Ten-year Treasury Note and the (0-day Treasury Bill. WTI is the
349 annualized price of West Texas Intermediate Crude Oil. All data is over the sample period 1970 to 2018. *, ** , and *** signify significance at
350 the 10%, 5% and 1% level respectively. Standard errors are in parentheses.

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 Variable/Statistic Coefficient/Value

ed
Constant -1.986921**
(0.864461)
NAOt-1 1.610081***
(0.612827)
CRFt-1 -0.287549

iew
(0.225756)
DEFt-1 4.438531***
(0.676559)
TERMt-1 -0.175468
(0.249710)
WTIt-1 -0.009597

ev
(0.009724)
Scale 1.764456***
(0.207982)
Akaike info criterion 4.404216

r
Log likelihood -98.70119
351

352 er
The coefficient is positive and significant at the 1% level, indicating that Sovereign Debt Crises
pe
353 are more likely when the NAO is up. Severe drought has been tied to NAO variability (Cullen

354 and de Menocal (2000)), particularly in Europe. There have been nine Sovereign Debt Crises in

355 Europe. Turkey in 1978, Romania in 1982, Poland in 1981, Albania in 1990, Russia in 1998, the
ot

356 Ukraine in 1998 and 2015, Moldova in 2002 and Greece in 2012. As Figure 3 shows, the NAO

357 was
tn

358
rin

359
ep
Pr

This preprint research paper has not been peer reviewed. Electronic copy available at: https://ssrn.com/abstract=4392352
 NAO

ed
1.2

0.8

iew
0.4

0.0

ev
-0.4

-0.8

r
-1.2
70 75 80 85 90 95 00 05 10 15
360

361 Figure 3
er
pe
362 above 0 during each of these episodes. Hurrell et al (2003) notes the connection between a

363 positive NAO index and drier conditions in central and southern Europe. 1982 was an extreme

364 drought year in Romania (Mateescu et al (2013)). In 1990, Albania was undergoing a drought
ot

365 that forced the closure of hydroelectric plants and thus factories (U.S. Library of Congress
tn

366 (1992)). Both Russia and the Ukraine were undergoing droughts in 1998 (Climate Change Post

367 (2021)). Greece’s Debt crisis in 2012 came at the end of a drought that was called the driest since
rin

368 1100 AD (Nature (2016)). The 2015 Ukrainian Debt default was also accompanied by a pan-

369 European drought (Ionita et al (2017)). So we can track six of the nine directly to the NAO

370 index.
ep

371 The fourth significant index is the Pacific Decadal Oscillation Index. Its results are shown

372 in Table 5
Pr

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373 Table 5

ed
374 Censored Extreme Value Regression of PDO on Sovereign Debt Crisis Indicator
375 This table shows the Tobit regressions results from regressing the Sovereign Debt Crisis Indicator on the variables in the table. PDO is the Pacific
376 Decadal Oscillation Index. CRF is the change in the annual 90-day US Treasury Bill rate. DEF is the annual difference between the Moodys
377 AAA and BAA rates. TERM is the annual difference between the US Ten-year Treasury Note and the (0-day Treasury Bill. WTI is the
378 annualized price of West Texas Intermediate Crude Oil. All data is over the sample period 1970 to 2018. *, ** , and *** signify significance at
379

iew
the 10%, 5% and 1% level respectively. Standard errors are in parentheses.
Variable/Statistic Coefficient/Value
Constant -0.519446
(0.907721)
PDOt-1 1.073168***
(0.398962)
CRFt-1 -0.412846**

ev
(0.195353)
DEFt-1 3.639697***
(0.603580)
TERMt-1 -0.400408*

r
(0.227663)
WTIt-1 -0.006884

Scale

Akaike info criterion

er (0.007753)
1.593601***
(0.144547)
4.261024
pe
Log likelihood -95.26457
380

381 The results for the PDO are positive and significant at the 1% level, so that Debt Crises are more
ot

382 likely when the PDO is rising. Warm periods in the PDO coincide with dry periods in eastern

383 Australia, Korea, Japan, the Russian Far East, Alaska, The United States, Central America, and
tn

384 South America (Mantua and Hare (2001)). The PDO has also been linked to Indian monsoon

385 rainfall (Krishnan and Sugi (2003)).

rin

386 Figure 4 illustrates the warm periods for the PDO. They primarily occurred during the late

387 seventies through the mid-eighties, the mid-nineties, 2003, and 2014-2016.
ep
Pr

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 PDO

ed
1.5

1.0

iew
0.5

0.0

-0.5

ev
-1.0

-1.5

r
-2.0
70 75 80 85 90 95 00 05 10 15
388

389 Figure 4
er
pe
390 In South America, the warm periods of the PDO would be associated with the 2014 drought

391 and Debt Crisis in Argentina and the 1994 drought and Debt crisis in Brazil.
ot

392 In Central America between 1970 and 2018, there were eight Sovereign Debt Crises:

393 Nicaragua in 1980, Costa Rica and Honduras in 1981, Mexico in 1982, Panama in 1983, and
tn

394 Belize in 2007, 2012, and 2017. Warm periods coincide with Nicaragua 1980, Costa Rica

395 and Honduras 1981, and Panama 1983. In 1980 Nicaragua underwent a drought which
rin

396 severely depressed the country’s agriculture (Gourdji et al (2015)). In 1981 both Costa Rica

397 and Honduras experienced precipitation shortfalls (ECLAC (2015)). The debt crisis in
ep

398 Panama in 1983 was accompanied by one of the driest years in the Central Americas (STRI

399 (2015)).
Pr

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400 The fifth significant index is the Pacific North American Pattern. The estimation results

ed
401 are exhibited in Table 6.

402 Table 6

iew
403 Censored Extreme Value Regression of PNAP on Sovereign Debt Crisis Indicator
404 This table shows the Tobit regressions results from regressing the Sovereign Debt Crisis Indicator on the variables in the table. PNAP is the
405 Pacific North American Pattern Index. CRF is the change in the annual 90-day US Treasury Bill rate. DEF is the annual difference between the
406 Moodys AAA and BAA rates. TERM is the annual difference between the US Ten-year Treasury Note and the (0-day Treasury Bill. WTI is the
407 annualized price of West Texas Intermediate Crude Oil. All data is over the sample period 1970 to 2018. *, ** , and *** signify significance at
408 the 10%, 5% and 1% level respectively. Standard errors are in parentheses.
Variable/Statistic Coefficient/Value

ev
Constant -1.693798**
(0.733123)
PNAPt-1 1.708833**
(0.784947)

r
CRFt-1 -0.151019
(0.176704)
DEFt-1 4.303886***

TERMt-1 er (0.536096)
-0.100523
(0.235513)
pe
WTIt-1 -0.018632**
(0.008599)
Scale 1.655463***
(0.156966)
Akaike info criterion 4.336756
Log likelihood -97.08213
ot

409

410 The coefficient on the PNAP is positive and significant, indicating that when the PNAP is rising,
tn

411 the likelihood of Sovereign Debt Crises goes up. The Pacific North American Pattern (PNAP) is

412 recognized as a major mode of low-frequency variability over the Northern Hemisphere
rin

413 (Rodinov and Assel (2001)). The PNAP is strongly correlated with monthly temperatures in

414 many US climatic divisions. Leathers et al (1991) demonstrate that the PNAP is highly
ep

415 correlated with North American temperature and precipitation. So an obvious place for influence

416 is the Caribbean and Mexico. However, the PNAP is not connected in the literature with any
Pr

417 extreme events.

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418 In this era from 1970 through 2018, there are six Debt crises, Jamaica in 1978 and 2010,

ed
419 Mexico and the Dominican Republic in 1982, Trinidad and Tobago in 1989, the Dominican

420 Republic again in 2003, and Grenada in 2004. As Figure 5 shows, all these years seem to

iew
PNAP
1.2

ev
0.8

0.4

r
0.0

-0.4
er
pe
-0.8
421 70 75 80 85 90 95 00 05 10 15

422 Figure 5
ot

423 coincide with years when the average of the PNAP was high except Trinidad and Tobago
tn

424 1989.

425 The sixth significant result is the North Pacific Oscillation as shown in Table 7.
rin

426 Table 7
427 Censored Extreme Value Regression of NPO on Sovereign Debt Crisis Indicator
428
ep

This table shows the Tobit regressions results from regressing the Sovereign Debt Crisis Indicator on the variables in the table. NPO is the North
429 Pacific Oscillation Index. CRF is the change in the annual 90-day US Treasury Bill rate. DEF is the annual difference between the Moodys AAA
430 and BAA rates. TERM is the annual difference between the US Ten-year Treasury Note and the (0-day Treasury Bill. WTI is the annualized price
431 of West Texas Intermediate Crude Oil. All data is over the sample period 1970 to 2018. *, ** , and *** signify significance at the 10%, 5% and
432 1% level respectively. Standard errors are in parentheses.
Variable/Statistic Coefficient/Value
Constant 658.3063***
Pr

(253.0535)
NPOt-1 -0.653471***

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 (0.249714)

ed
CRFt-1 0.383565
(0.236018)
DEFt-1 4.948378***
(1.018348)
TERMt-1 0.558682*

iew
(0.332782)
WTIt-1 -0.016163
(0.012043)
Scale 1.862151***
(0.200187)
Akaike info criterion 4.541596

ev
Log likelihood -101.9983
433

r
434 The coefficient on the NPO is negative and significant at the 1% level. This indicates that when

435 the NPO is falling, the likelihood of Debt Crises increases. The NPO has been linked to Pacific

436 er
climate variability (Furtado et al (2012)), Pacific typhoon activity (Chen et al (2015)), and East
pe
437 Asian winter climate (Wang et al (2007)). There were four Sovereign Debt Crises in Asia over

438 the period 1970-2018. The Philippines in 1983, Vietnam in 1985, Indonesia in 1999, and the

439 Seychelles in 2008.

ot

NPO
1,015
tn

1,014
rin

1,013

1,012
ep

1,011
Pr

1,010
440 70 75 80 85 90 95 00 05 10 15

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441 Figure 6

ed
442 As figure 6 shows, the NPO was falling for all these eras except Vietnam 1985. Wang H.

443 et al (2007) show that the NPO is negatively correlated with typhoon activity and precipitation

iew
444 across the Pacific and Asian regions. In the Philippines, part of the economic crisis is

445 documented as being due to a prolonged drought that had adverse effects on output (Sicat

446 (1984)). Indonesia, in addition to facing civil unrest, also faced a severe drought in 1999

ev
447 (FAOUN (1998)). There was nothing reported in the Seychelles other than a minor forest fire.

448 The oscillations are often studied in conjunction with the El Nino Oscillation to explain

r
449 climatic conditions. I investigate the combinations of the El Nino Index with each of the other

450

451
er
oscillation indices. Three of the eleven combinations proved significant at the 10% level, a 1.85

% probability of such an event being due to chance according to the binomial distribution. The
pe
452 significant combinations are El Nino and the Indian Dipole Oscillation, El Nino and the North

453 Atlantic Oscillation, and El Nino and the Pacific North American Pattern.

454 The first combination examined is El Nino and the Indian Dipole Oscillation in Table 8.
ot

455 Table 8
tn

456 Censored Extreme Value Regression of ENSO*IDO on Sovereign Debt Crisis Indicator
457 This table shows the Tobit regressions results from regressing the Sovereign Debt Crisis Indicator on the variables in the table. ENSO is the El
458 Nino Index and IDO is the Indian Dipole Index. CRF is the change in the annual 90-day US Treasury Bill rate. DEF is the annual difference
459 between the Moodys AAA and BAA rates. TERM is the annual difference between the US Ten-year Treasury Note and the (0-day Treasury Bill.
460 WTI is the annualized price of West Texas Intermediate Crude Oil. All data is over the sample period 1970 to 2018. *, ** , and *** signify
461 significance at the 10%, 5% and 1% level respectively. Standard errors are in parentheses.
rin

Variable/Statistic Coefficient/Value
Constant -5.339741***
(1.791519)
ENSO*IDOt-1 -5.124426*
ep

(2.913190)
CRFt-1 0.662052
(0.408780)
DEFt-1 5.953187***
(1.466130)
Pr

TERMt-1 1.100053**
(0.477670)

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 WTIt-1 -0.032927*

ed
(0.017595)
Scale 2.764916***
(0.414530)
Akaike info criterion 3.531893
Log likelihood -77.76543

iew
462

463 As Table 8 shows, the coefficient on the crude combination of ENSO*IDO is negative and

464 significant at the 10% level, indicating that falls in the combination lead to a greater likelihood of

ev
465 Sovereign Debt Crises. Figure 7 illustrates the pattern of the ENSO*IDO combination.

r
er
pe
ot
tn

466
rin

467 Figure 7

468 There has been extensive research on the interaction between the ENSO and the IDO (See Luo et
ep

469 al (2010) for a review). Pan et al (2018) connect the combination of the ENSO and the IDO with

470 Indonesian droughts and wildfires linking the Indonesia drought and Debt crisis in 1999. Hoell et
Pr

471 al (2017) link the combination of the ENSO and the IDO with Sothern African Precipitation, thus

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472 linking the events to the Sovereign Debt Crises of the six previously discussed droughts in

ed
473 Southern Africa.

474 The second combination examined is ENSO and the NAO this is exhibited in Table 9.

iew
475 Table 9
476 Censored Extreme Value Regression of ENSO*NAO on Sovereign Debt Crisis Indicator
477 This table shows the Tobit regressions results from regressing the Sovereign Debt Crisis Indicator on the variables in the table. ENSO is the El
478 Nino Index and NAO is the North Atlantic Oscillation Index. CRF is the change in the annual 90-day US Treasury Bill rate. DEF is the annual
479 difference between the Moodys AAA and BAA rates. TERM is the annual difference between the US Ten-year Treasury Note and the (0-day

ev
480 Treasury Bill. WTI is the annualized price of West Texas Intermediate Crude Oil. All data is over the sample period 1970 to 2018. *, ** , and ***
481 signify significance at the 10%, 5% and 1% level respectively. Standard errors are in parentheses.
Variable/Statistic Coefficient/Value
Constant -5.639446***
(1.848825)

r
ENSO*NAOt-1 -3.257819**
(1.489678)
CRFt-1

DEFt-1
er 0.440466
(0.404696)
6.031618***
(1.493096)
pe
TERMt-1 0.955009**
(0.452562)
WTIt-1 -0.024120
(0.016391)
Scale 2.823084***
ot

(0.438630)
Akaike info criterion 3.532751
Log likelihood -77.78603
482
tn

483 The relationship between the crude combination and the Sovereign Debt Crisis indicator is
rin

484 negative and significant at the 5% level. Figure 8 illustrates the ENSO*NAO pattern.
ep
Pr

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 ed
iew
r ev
485

486 Figure 8
er
pe
487 The ENSO/NAO combination is tied to European and North African precipitation (Knippertz et

488 al (2003). There have been nine Sovereign Debt crises in Europe. Turkey in 1978, Romania in

489 1982, Poland in 1981, Albania in 1990, Russia in 1998, the Ukraine in 1998 and 2015, Moldova
ot

490 in 2002, and Greece in 2012. In 1990, Albania was undergoing a drought that forced the closure
tn

491 of hydroelectric plants and thus factories (U.S. Library of Congress (1992)) and this followed a

492 down year in the indices. Both Russia and the Ukraine were undergoing droughts in 1998
rin

493 (Climate Change Post (2021)) and this followed a down year in the indices. Greece’s Debt crisis

494 in 2012 came at the end of a drought that was called the driest since 1100 AD (Nature (2016))

495 and this followed a down year in the indices. So, four of the nine can be tied to the combination.
ep

496 There have been 15 Sovereign Debt Crises in Northern Africa from 1970 to 2018. A

497 severe drought accompanied the Sierra Leone Debt crisis in 1977 (Gommes and Petrassi (1996)).
Pr

498 As it also did for the Sudan in 1979 (Gommes and Petrassi (1996)). Both years were

This preprint research paper has not been peer reviewed. Electronic copy available at: https://ssrn.com/abstract=4392352
499 accompanied by a declining ENSO*NAO. Maish et al (2014) record severe droughts in Liberia

ed
500 (1980) and Morocco (1983) that coincide with their Sovereign Debt Crises. Though only in 1980

501 was the ENSO*NAO combo down. The Sudan entered a five-year-long drought in 1979 during

iew
502 its Sovereign Debt crisis (Mattsson and Rapp (1991)). The ENSO*NAO was down. Nicholson

503 (1985) documents that Senegal during its 1981 Sovereign Debt Crisis was undergoing a multi-

504 year drought. The drought and famine of 1983-84 are well-documented (see Derrick (1984)) and

ev
505 struck many nations on the continent. Morocco, Niger, and Nigeria defaulted in 1983. Eqypt and

506 Cote D’Ivoire in 1984. Gommes and Patrassi (1996) document that there was a drought in 1989

r
507 that undoubtedly played a role in Cameroon’s Sovereign Debt Crisis in 1989. Meddi et al (2014)

508

509
er
show that Algeria was suffering from drought during its 1994 Sovereign Debt Crisis.

The third combination is the ENSO-PNAP. The estimation results are shown in Table 10.
pe
510 Table 10
511 Censored Extreme Value Regression of ENSO*PNAP on Sovereign Debt Crisis Indicator
512 This table shows the Tobit regressions results from regressing the Sovereign Debt Crisis Indicator on the variables in the table. ENSO is the El
513 Nino Index and PNAP is the Pacific North American Pattern Index. CRF is the change in the annual 90-day US Treasury Bill rate. DEF is the
514
ot

annual difference between the Moodys AAA and BAA rates. TERM is the annual difference between the US Ten-year Treasury Note and the (0-
515 day Treasury Bill. WTI is the annualized price of West Texas Intermediate Crude Oil. All data is over the sample period 1970 to 2018. *, ** , and
516 *** signify significance at the 10%, 5% and 1% level respectively. Standard errors are in parentheses.
Variable/Statistic Coefficient/Value
Constant -4.965311***
tn

(1.711979)
ENSO*PNAPt-1 3.172992*
(1.751594)
CRFt-1 0.612816*
rin

(0.367995)
DEFt-1 5.390775***
(1.329711)
TERMt-1 0.892282*
(0.486777)
ep

WTIt-1 -0.025388
(0.018178)
Scale 2.745549***
(0.394236)
Pr

Akaike info criterion 3.510856

Log likelihood -77.26054

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517 The coefficient on the ENSO*PNAP combination is positive and significant at the 10% level.

ed
518 Figure 9 illustrates the combination.

iew
r ev
er
pe
519

520 Figure 9
ot

521 Y. Wang et al (2021) present evidence that the ENSO-PNAP pair affects precipitation over

522 North America and the Caribbean. In this era from 1970 through 2018, there are six debt crises,
tn

523 Jamaica in 1978 and 2010, Mexico and the Dominican Republic in 1982, Trinidad and Tobago in

524 1989, the Dominican Republic again in 2003, and Grenada in 2004. Mendoza et al (2005) link
rin

525 the 1982 drought in Central Mexico with El Nino during the Mexican Sovereign Debt Crisis.

526 Over 10% of the Dominican Republic’s agricultural area was in drought during the Debt Crises
ep

527 in 2003 (Payano-Almanzar and Rodriguez (2018)). Farrell et al (2010) document the Caribbean-

528 wide drought that afflicted Jamaica during the 2010 Sovereign Debt Crisis.
Pr

529

This preprint research paper has not been peer reviewed. Electronic copy available at: https://ssrn.com/abstract=4392352
530

ed
531 Altogether, out of 71 Sovereign Debt Crises in the database, I can tie 47 to droughts that

532 contributed to the Sovereign Debt Crises that were probably caused in part by Climatic

iew
533 Oscillations. And this ignores that records on droughts in many parts of the world are very

534 incomplete.

5. Conclusions

ev
535

536 Global debt has reached an all-time high of roughly 230 percent of the World's GDP in

r
537 2018. The increase has been driven by a synchronized buildup in debt amongst emerging market

538 and developing economies (Koh et al (2020)). There have been many explanations for this build-

539
er
up of government debt, but one that has been ignored by mainstream economists is the increasing
pe
540 prevalence of extreme weather events such as droughts due to climate change and climatic

541 oscillation driven by climate change that damage economies and contribute to Debt Crises.

542 As the evidence in this paper makes clear, even with incomplete drought records, several
ot

543 climatic oscillations can be tied with 47 of the 71 Sovereign Debt Crises between 1970 and 2018.

544 This is a significant result given the patchy records that are dealt with.
tn

545 The policy implications are that countries that build up debt are not entirely
rin

546 “spendthrifts”, they may be responding to exogenous shocks that are forcing them to borrow to

547 relieve their populations during emergencies. This should be taken into consideration in

548 providing rescue packages. And the current climatic situation should also be taken into
ep

549 consideration in making policy recommendations by creditors and the International Monetary

550 Fund when putting together rescue packages. More time to pay off debt should be considered and
Pr

551 less stringent spending cuts must be put in place in such situations.

This preprint research paper has not been peer reviewed. Electronic copy available at: https://ssrn.com/abstract=4392352
552 Future research should be done on the contributions of droughts to the debt loads of

ed
553 countries. Also, the contribution of climatic oscillations to productivity could be investigated.

554 This is left to future research.

iew
555

556 References
557 Adams, R. M., Bryant, K. J., McCarl, B. A., Legler, D. M., O'Brien, J., Solow, A., & Weiher, R.

ev
558 (1995). Value of improved long‐range weather information. Contemporary Economic
559 Policy, 13(3), 10-19.
560
561 Alarcon, I.C. 2009. Droughts in Peru. Presentation. NATIONAL METEOROLOGY AND

r
562 HYDROLOGY SERVICE, Republica Del Peru. December 2009.
563 http://www.wamis.org/agm/meetings/wies09/S37-Alarcon.pdf Downloaded December 8,
564 2021.
565
566
567
er
Amelio,J.2019. The Curious Case of Filanbanco and the Isaias Brothers
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