In many countries in North and South America, water scarcity could become a macroeconomically relevant concern. While countries in the Americas have substantial surface water and groundwater resources, available indicators show that these are being depleted. As a key input into production processes (agriculture, power generation, industrial use) and a common good, water resources risk being overexploited. Regressions with panel data for 169 countries between 1990 and 2020 show that higher water scarcity is associated with lower GDP growth and investment, and higher inflation. Water use efficiency is associated with higher GDP growth and lower inflation. Climate scenarios show risks of much more severe water shortages in the future, threatening its sustainable use. This could impose higher costs on individual sectors and on the economy, reducing output and pushing up prices. Water availability and use could thus become an area for economists and central banks to monitor in the context of climate change, economic forecasting and monetary policy.
| Repository name | URI |
|---|---|
| Reproducible Research Repository (World Bank) | https://reproducibility.worldbank.org |
Paper exhibits were reproduced on a computer with the following specifications:
• OS: Windows 11 Enterprise
• Processor: INTEL(R) XEON(R) PLATINUM 8562Y+ 2.80 GHz (4 processors)
• Memory available: 32.0 GB
Run time: ~ 45 minutes
Update the global in line 3 in the do-file "Main_WaterScarcity_FMM_2025" and run the do-file.
All data sources are publicly available and included in the reproducibility package.
| Author | Affiliation | |
|---|---|---|
| Serafin Martinez Jaramillo | World Bank | smartinezjaramil@worldbank.org |
| Jon Frost | BIS | jon.frost@bis.org |
| Carlos Madeira | Banco Central de Chile | carlosmadeira2009@u.northwestern.edu |
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| Location | Code |
|---|---|
| World | WLD |
The materials in the reproducibility packages are distributed as they were prepared by the staff of the International Bank for Reconstruction and Development/The World Bank. The findings, interpretations, and conclusions expressed in this event do not necessarily reflect the views of the World Bank, the Executive Directors of the World Bank, or the governments they represent. The World Bank does not guarantee the accuracy of the materials included in the reproducibility package.
| Name | URI |
|---|---|
| Modified BSD3 | https://opensource.org/license/bsd-3-clause/ |
| Name | Affiliation | |
|---|---|---|
| Serafin Martinez Jaramillo | World Bank | smartinezjaramil@worldbank.org |
| Reproducibility WBG | World Bank | reproducibility@worldbank.org |
| Name | Abbreviation | Affiliation | Role |
|---|---|---|---|
| Reproducibility WBG | DECDI | World Bank - Development Impact Department | Verification and preparation of metadata |
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