Extreme heat causes labor productivity to fall. Supply shortfalls caused by this have an impact on global trade: Less is exported and importers have to accept the losses of affected exporters or switch to other exporters, which causes additional costs. A study by ZEW Mannheim and Frankfurt School of Finance & Management shows for the first time that substantial parts of the trade-related economic damage from heat waves occur in countries that are not directly exposed to the temperature shocks.
